Apollo Munich Health Insurance Company Ltd plans to expand by opening around 40 branches a year over the next two-three years, a company official said on Monday.

The stand-alone health insurance company is expected to close this fiscal with a total premium of around Rs 1,700 crore, Krishnan Ramachandran, the company’s Deputy Chief Executive Officer, told the media here.

He said the company closed last year with a total premium income of around Rs 1,300 crore. “By the end of this month our total premium income for the current year will be around Rs 1,000 crore.”

“We have 158 offices now. Our plan is to add 40 branches per year over the next two-three years. The opportunity is immense as health insurance has not penetrated in the country to a large extent,” he added.

He said as per the company’s plans, each branch would turn profitable within three years.

The process of linking policyholders’ Aadhaar Card numbers with their policies is progressing smoothly, said Ramachandran who was here to launch the company’s new health insurance product ‘Health Wallet’.

According to him, 55 per cent of the company’s total business is from individual agents (average premium per policy is around Rs 15,000), 25 per cent from bancassurer (banks selling insurance policies as corporate agents), five per cent direct and the balance from brokers and other channels.

He said the company is yet to post underwriting profit (premium minus claims paid) while it is profitable overall.

According to Ramachandran, the company processed claims in-house for three years which led to significant cost reduction of around Rs 40 crore.

Queried about the third-party claims administrators (TPA) — agencies that process health insurance claims for non-life insurers — Ramachandran said: “The TPAs need to evolve further by investing in technology.”

He said compared to other non-life insurance products, the claims frequency is relatively higher in the case of health insurance. Hence the policyholders have to be satisfied as settlement of claims is the core promise made by an insurer to the insured.

On the launch of new products, the official said 3-4 products are at various stages of evolution and would be launched in the near future.

Agreeing that the company is not focusing on the overseas travel insurance Ramachandran said the domestic health insurance segment is so huge to cater to and hence the company is not currently focused on that segment.

Queried about raising further capital for business needs, Ramachandran said the company raised Rs 75 crore as Tier II capital which is enough for the business for the near term.