Vidal Health Insurance TPA has acquired Vipul Medcorp Insurance TPA for an undisclosed amount. This is the first such deal in the third-party administrator (TPA) space.
Set up in 1993, Vipul Medcorp had an income of Rs 50.7 crore in FY20.
The combined revenue of both companies will exceed Rs 200 crore after the acquisition is complete. Post-acquisition, Vidal Health Insurance TPA will be the second-largest player in the segment after Medi Assist.
TPA is an entity that processes insurance claims under medical insurance. Every insurance company appoints TPAs for health policy claims settlements. When a claim is filed under a health policy, the TPA manages the claim documentation and processing and passes this information to the insurer to settle the claim.
In an interaction with Moneycontrol, Girish Rao, Chairman & Managing Director, Vidal Health said the idea behind the acquisition was to expand the presence in the retail business.
"Regulations were changed last year when IRDAI has allowed retail customers to choose their TPA. So we felt that there was an opportunity to expand further into the retail business. Vipul Medcorp has been a retail-focused player so this acquisition will help us on that front," he added.
Rao said the acquisition will be completed over the next four to five months following which all Vipul customers will be serviced by Vidal Health.
Set up in March 2002, Vidal Health has bagged close to 60 percent share of the state and central government policy implementation under the Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana.
As of FY20, Vidal Health had total revenue of Rs 87.5 crore as per its annual returns filed. It has three million lives managed with more than 10,000 hospitals. Vidal Health's provider network partnerships extend to Asia, Europe and North America.
Rajan Subramaniam, CEO of Vipul Medcorp, in a statement, said this merger will help deliver superior services to health insurance customers.
After the merger, Vidal Health will have an equal share of government business, corporate business and retail business in health insurance.
Along with this acquisition, Vidal Healthcare Services (VHC), the parent entity of Vidal Health has also acquired a group company of Vipul Medicorp, Vipul Medcare.
Rao said there could be further consolidation in the TPA industry in the future.
"Technology is playing a role in the industry. Players will need to have a good scale to make these necessary investments. Else, they would fall behind. Eventually, there may only be four to five players in this space," he added.
As a TPA, Vidal Health helps customers manage claims and also offers wellness programmes to manage their health. It also offers teleconsultation and outpatient facility with over 4,000 physicians and specialists.