Reliance Capital, part of the Anil Dhirubhai Ambani Group, today announced that it will carve out its retail health insurance business from its general insurance business into a standalone, wholly-owned subsidiary. Reliance General Insurance operates in the non-life space.
In a statement to the stock exchanges, Reliance Capital said that the Board of Reliance General Insurance has approved this proposal, subject to necessary approvals from Insurance Regulatory and Development Authority of India (IRDAI) and other authorities.
The proposed health insurer, Reliance Health Insurance, will be a wholly-owned subsidiary of Reliance Capital. Retail health insurance is a profitable segment for the non-life industry.
The business recorded gross written premium of Rs 570 crore as of March 31,2016 through its network of over 175 branches across the country. Health insurance in India has been amongst the fastest growing insurance sectors and is expected to nearly double to nearly Rs 50,000 crore (USD 8 billion) by 2020.
“The proposal will enhance management focus on health insurance and provide flexibility to the company to unlock value by bringing in global leaders in this space as strategic and equity partners,” said Reliance Capital in a statement. Reliance Capital has appointed Ravi Viswanath, with over 20 years global experience in health insurance, as CEO of the new company.Anil Ambani, Chairman of Reliance Capital, in their annual general meeting in 2015 had proposed that their health insurance business would be carved out into a separate entity.