Joint venture in health insurance

Attracted by the affluence of the country’s growing middle class, Cigna Corp. announced that it would team up with an Indian conglomerate to sell health insurance in India.
Cigna’s partner in the joint venture is the sprawling TTK Group – known in India for selling items as diverse as condoms, lipstick, and pressure cookers.
“For health insurance, for private insurance, India is very underpenetrated, only 4 percent,” said Michael Ross, senior vice president for marketing at Cigna International. “All the demographics are favorable.”

Ross is charged with building up the company’s private (as opposed to employer-based) health insurance around the world.
Government-funded health care, Ross said, covers only about 9 percent of India’s population. The potential market is 90 million households, he said.
“Because a lot of people don’t have insurance,” he said, “when they do have health-care needs, they fund it out of pocket – 64 percent of health-care expenditures are funded out of pocket by individuals.”

The move to India, Cigna’s latest international venture, comes months after the company, one of the nation’s largest health insurers, moved its headquarters from Philadelphia to Connecticut.
Many corporate functions remain in Philadelphia, including Cigna’s international division, which is the company’s fastest-growing and most profitable division. The division’s third-quarter profit is up 58 percent over 2010’s third quarter, compared with a 3.3 percent increase in profit in Cigna’s main business of selling employee health insurance to large corporations.
Cigna’s international business began as a side service to corporations, developing health insurance coverage for their expatriate employees.

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