TBY talks to Ramesh Kurup, CEO of HYGEIA HMO, on consolidation in healthcare providers, the significance of SMEs, and health insurance for the country's informal sector.

Ramesh Kurup
Ramesh Kurup is the CEO of HYGEIA HMO. He has over 24 years of field experience in accounting, health, and general insurance. He has a degree in Commerce from the University of Kerala, India and is also a member of the Insurance Institute of India. He was previously the COO of Strategis Insurance Limited, Tanzania, where he was responsible for the various operations of the organization. He also held a variety of senior management roles at Bajaj Allianz General Insurance, India and The New India Assurance Co. Ltd., India. He joined Hygeia HMO in January 2012.

As of today, Nigeria has over 70 health maintenance organizations (HMOs) spread across the country. How do you see this number evolving in the future?

I see consolidation on the horizon. Within the existing regulations, the National Health Insurance Scheme (NHIS) has pursued a re-accreditation of the HMOs to look at their minimum requirements to operate. The foremost requirement is that HMOs that are operating in all states and geo-political zones of the country (called national HMOs) should have a minimum capital of slightly above $2 million. The deadline for the HMOs to meet the requirements was August 31, 2014. This criterion is one thing that could bring about a lot of consolidation in the form of HMO mergers and acquisitions. With this consolidation happening, the number of HMOs will come down from the present 77 and the remaining players will be financially stronger. Something similar just happened here in the banking sector; it has also happened in the insurance sector. Another reason why I feel it will happen and the health insurance industry will become strengthened is that there is a new National Health Insurance Commission Act and National Health Insurance Commission coming in. It will be a financial cum healthcare regulator in practice.

What is Hygeia HMO's customer segment? Do you see any other market in the population potentially in need of your services?

The market has different segments. One is employees in the formal sector. It is easy to identify them. Naturally, the client is the employer because in this case they are the ones paying for it. That is one of the factors that has contributed to the growth of health insurance in Nigeria. In our case, what we normally do is differentiate employers by size in terms of the number of employees. We operate today in segments where there are at least 10 employees. For us, from 10 up to 50 employees is an SME. Up to 200 or so is “corporate" and up to 500 is “large corporate." The idea is to have structured pricing and product packaging depending on the level of the client. We have clients with more than 65,000 enrollees also. We only do SME and corporate business today. But, we must bear in mind that the majority of the population is not formally employed or they are employed in organizations with three or four employees. It is the people who are either employed in the informal sector or on their own, in SMEs, who are looking for coverage for themselves and their families, or themselves and their two or three employees. That is the next market. Reaching out to them is the biggest challenge. Customer retention in this segment is also a problem. At the end of this year we will venture into the SME sector for the high-end market. The mid and low segments will follow. We will not venture into the lowest segment of the market, as our not-for-profit venture called Hygeia Community Health Care (HCHC) is handling that segment of the market.

Do you foresee coming up with any special plans to serve these sub-segments of the market?

Yes. Today we have HyEssential Plus, HyPriority Plus, HyClassic Plus, and HyPrestige Plus. Our vision is to be fully up to international standards. All of our existing plans only cover domestic care. You are not up to international standards if you do not provide coverage outside of Nigeria, because there is care that is not available in Nigeria. Providing coverage outside of Nigeria is part of the strategy. We will be venturing into that direction this year. Hygeia is the strongest brand in this business in the country, and we will be building strategic partnerships with the strongest international brands. That will be the stepping-stone for us to start venturing into the SME segment and the retail segment in a big way.