Ladies and gentlemen, good day and welcome to Niva Bupa Health Insurance Company Limited Q4 and FY 2026 earnings conference call hosted by ICICI Securities. Please note that any statements and comments made in today's call that may look like forward-looking statements are based on the information presently available to the management and do not constitute any indication of any future performance, as future performance involve risks and uncertainties which could cause results to differ materially from the current view being expressed.
As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then 0 on a touch tone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr. Rushad Kapadia from ICICI Securities. Thank you and over to you, sir.
Thank you. Good evening, ladies and gentlemen. It is a privilege to host the management team of Niva Bupa Health Insurance Company Limited for their Q4 FY 2026 results conference call. We have from the management Mr. Krishnan Ramachandran, MD and CEO, Mr. Vishwanath Mahendra, ED and CFO, Mr. Ankur Kharbanda, ED and Chief Business Officer, Mr. Bhabatosh Mishra, Chief Operating Officer, and Mr. Vikas Jain, Chief Investment Officer. Without further ado, I would now like to hand over the call to Mr. Krishnan Ramachandran. Thank you, and over to you, sir.
Thank you. Thank you to all of you who have gathered this evening, Friday evening to be with us. Much appreciated. I'll divide my update into two parts. The first is some perspectives on what's going on in the industry, the second, of course, is Niva Bupa. As far as the industry is concerned, you know, there are a number of ongoing positive developments.
The awareness campaign, Achcha Kiya, Insurance Liya. You know, in Q4 as well, the GI industry, led by health, executed on an awareness campaign, which is now an awarded campaign. All of the KPIs for the campaign in terms of specifically around reach and awareness are certainly very encouraging. This is a campaign, as you all know, that we will continue.
It's a multi-year campaign. The second update is GST continues to be a positive, continues to be a positive or a tailwind for the industry. Indeed, now with the benefit of the entire H2 behind us, you know, the re-retail health growth, if you looked at health H2 for the industry, was about 30%. You know, with Niva Bupa, our retail health growth for the same period was in excess of 40%.
Continued strong volume and value growth on the back of what has been a transformational policy reform. The industry initiatives around hospitals, you know, collaboration around healthcare continue apace. The common empowerment initiative has now reached 2,500 hospitals, where the MoU has either been signed or is ready to be signed.
You know, the last time we spoke, I mentioned that standard treatment protocols for eight infections Sorry, seven infections are live. Work is at a very advanced stage in terms of adding guidelines for modern cancer treatments as well as robotic surgeries. And, you know, going live with the standard treatment workflows, and there's 144 of them. All of these initiatives help bring about higher transparency and standardization of care, of care pathways and, you know, claims cost is embedded in these care pathways. I think these are great initiatives to bring about transparency and improve affordability as far as health insurance is concerned.
The other big recent positive development which happened in Q4 is the notification of the Ind AS standard or the, you know, the IFRS 17 global standard, which is now effective April 2026. You know, as Niva Bupa, we've always been reporting or leading with the IFRS accounts. This is something that we will be going live with starting this quarter itself. We do view this as an extremely positive development in terms of bringing about transparency as well as standardization in terms of how accounting is looked at within the insurance industry.
Coming on to Niva Bupa, when I look back at the financial year, we closed at a strong 27.4% overall growth rate for a GWP of INR 9,433 crores. I still continue to, you know, talk about these numbers on a 1/N basis. In a similar vein, retail growth was 35% for the full year. Our profit after tax on an Ind AS basis was INR 366 crores on a full year basis, up from INR 203 crores the prior financial year. Our return on net worth crossed double digit for a, you know, for a 10.7% ROE number.
Our market share on retail health closed at 10.1% on a full year basis, up from 9.4%. In Q4 specifically, we moved our market share to 10.4%, up from 9%. On talent, we continued our journey of emphasizing and placing a lot of importance in all of the talent management processes. Once more, we were recertified as a great place to work. We continue to figure in the top 25 in banking and financial services. While we still don't know our rank, but we'll certainly figure in the top 100 of all companies of all sizes in India. On customer, you know, a few KPIs that we monitor, specifically NPS, across more than 25 pivotal customer-facing touchpoints.
On a weighted average basis, this number moved up to 60, up from 55 the prior year. We continued to hold strong on claim settlement at 94% plus on a full year basis. Our journey on analytics, generative AI and technology across the entire value chain continues, and we have more than 30 pilots or projects underway across the entire value chain using some of these modern technologies. Two other customer-centric as well as, you know, health cost management measures. One is our preferred provider network, which is now present in 49 cities, more than 1,000 hospitals, and 20% of claims in these cities go through these hospitals.
We continue to be a strong health partner of choice for an increasingly large number of Indians, you know, as evidenced by the increased utilization metrics on our customer app, whether it's doctor consults, health checkups, or any of the new services that we have launched in the last financial year. With that, I am going to hand over to Vishwanath for an update on our financial performance.
Thank you, sir, and good evening, everyone. Like Mr. Krishnan Ramachandran mentioned, our profit for the year grew by 80%. The same number for the Q4 is 90%. 90% increase over last year, Q4. The combined ratio for FY 2026 under IFRS has improved by 160 basis points to 101.4%. While there is increase in overall loss ratio by 1.1%, primarily due to mix change, this has been more than offset by reduction in expense ratio by 2.7%, resulting in improvement in combined ratio. The Expenses of Management ratio for FY 2026 improved to 33.7% from 39.2% last year. This improvement is primarily driven by operating leverage and economies of scale.
The allowable AUM, including additional allowance, comes to around 36%, we have comfortably complied with the regulatory described AUM limit. Annualized investment yield for FY 2026 is 7.2%, with AUM of INR 9,670 crore. Solvency ratio is at healthy level of 2.49 as on 31 March , 2026. These were the financial highlights for FY 2026. We are open to questions.
Thank you very much, sir. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question is from the line of Supratim Bhatta from Jefferies. Please go ahead.
I, Thanks a lot for the opportunity. I have three questions. Starting with the growth bit, you know, again, you know, this has been a very strong year like you articulated at the start. Thinking of, you know, the next 2-3 years, assuming that, you know, you grow at somewhere around that 25% level, you know, which you have tried to meet and, you know, successfully done over the past few years.
Assuming that you grow at 25%, you will get to somewhere around the INR 15,000-INR 16,000 crore GWP. I wanted to understand what would, you know, what would you require to go from, you know, current INR 9,000, to that, you know, INR 15,000-INR 16,000 crore GWP. What would be the building blocks here? If you could give some color around that.
Secondly, when you reach this scale, what kind of operating expense ratios can you operate at at an IFRS level? Because your IFRS expense ratio has come down significantly since FY 2023. Wanted to understand what would be the steady state ratio here. That's the second. Lastly, there has been a lot of discussion around commission and commission regulations.
Obviously everything is speculation. Wanted to understand if there are, you know, caps or an absolute reduction in commission, how would you go about mitigating the impact? Would you pass it on to distributors or, you know, how would you go about, you know, addressing that situation? Those are my three questions. Thank you.
Thank you, Supratim Bhatta. In terms of building blocks, look, there is going to be continuity in terms of what's historically been the levers for our growth.
One of our sources of strength, we feel as a management team, and it's a strategic choice, is our multi-channel distribution architecture. Last year, you know, as you would have seen, we've considerably increased our distribution spread. You know, net addition of 58,000 agents, addition of 50-plus brokers, I think 23 additional financial institutions that are now part of our distribution strength.
Certainly one part of the growth, or a major part of the growth is going to continue to come from the distribution that we already have, and we will continue to invest and grow that distribution. Now layer onto that, this distribution we will use to tap newer and newer customer segments.
For example, you know, we now have a product portfolio that covers practically every income segment except, you know, poor or near poor people across the country. Using the same distribution to tap into more and more customer segments is a layer that will add that is a building block, if you will, on top of the distribution. Product, you know, products for segments is definitely a building block that will add on top of the distribution. The third one I would add is our strategy on Bharat. You know, through our own virtual agency as well as our bank distribution, we have access to every pin code in the country.
One of the distribution strategies that we've been doubling down on for the last two years is our Bharat strategy, which takes us into tier three cities and below. You know, we have doubled down in a couple of geographies last year. That's given us success, and the idea this year is to expand to more geographies. So broadly, of course, we will continue to experiment with new distribution archetypes or models.
But given what we know, and you know, of course, there is a continued inflection towards digital channels. We've seen significantly faster rates of growth in, you know, in our own digital channels, whether it's our own or through third parties. I'd say that's where that's been our source of growth.
We continue to believe that that'll be the source of growth or the building blocks, as you refer to it, for us. Of course, we will continue to pilot and experiment on variants or new models within this. Bharat is one example. There are many other examples across and within channels that we will test, pilot, and scale as we see success. That's the first part of your question in terms of where will the growth come from. On the IFRS part, I'm gonna request Vishwanath, and then I'll come back along with Ankur on the commission part.
Yeah. Supratim, in case of our long-term view on these ratios, what we can share with you is combined operating ratio or in case of IFRS, CISR, our model says it should be, let's say 99% or so, in FY 2029. The breakup of this in loss ratio and expense ratio, it may vary, of course, depending on what is the channel mix, product mix, et cetera. Broadly, to indicate the loss ratio may remain stable or may inch up by 100, 150 basis points. Entirely the saving will come from expense ratio. That 99% combined ratio which will translate to mid-to-high teens ROE, which is close to 11% currently.
Perfect. Okay. On, on commission, you know, Supratim, to your point, you know, we await guidance from the authority in terms of how they would like to move forward. Our belief is that the single limit on Expenses of Management has been an important and transformational change in the insurance industry.
It's in line with what happened in the asset management industry, where they have a total expense ratio, and they manage costs, including acquisition costs within that. Our belief and prayers to the authority, you know, continues to be around keeping a single limit of Expenses of Management and maybe a glide path to lower that. That is our belief.
Look, I think, what we have seen with the GST experience is that lower price or affordability does translate into volume and value growth and more robust protection for customers. You know, we are confident that whatever the authority comes up with, we'll make sure that the distribution is appropriately remunerated for the efforts that they make. Net-net it will translate into, you know, continued strong momentum. You know, if the answer is it makes the product more affordable, you know, we've clearly seen that volume growth more than compensates for, you know, for other aspects. You wanna add? Okay.
Ankur, just one last question.
On the EUM growth, it seems to have slowed down in FY 2026 versus the kind of growth that we have seen in the last two years. Wanted to understand, is there anything, you know, that needs to be taken into consideration when we're looking at EUM growth for the upcoming years?
Not really. It has to do with the raise of capital.
Okay
that's all. Otherwise, in terms of business, if you keep that aside, it is steady growth.
Understood. Okay. Thank you.
Thank you. Next question is from the line of Priyesh Jain from Motilal Oswal Financial Services. Please proceed.
Yeah, hi. Congratulations on great set of numbers. First question is just on the numbers front. There is some reversal of expense. Could you explain that on the shareholders account?
Which one you are referring to, Priyesh? You are referring to IFRS.
No, no, GAAP, Indian GAAP.
Indian GAAP, you're referring to which statement?
Shareholders account.
Oh, okay. EoM. Okay, understood.
Yeah.
What happened, till 31st December, we were slightly more than allowed EUM, so we transferred from policyholder to shareholder account. For the whole year, we met that, you know, EUM limit, so that was reversed. For the whole year there is no movement from policyholder to shareholder, and that's why that December number has been, you know, reversed. That's all. This, this is optical only.
Yeah
there's a contra entry, so it doesn't change anything.
Got that. Got that. The other question was on, you know, it's the long-term policy, right? What is the contribution of long-term policy to the overall retail premium today and, you know, how do you see that going ahead?
Long term, for us has been similar to what it was earlier years. In the last two, three years we have been steady. Around 20% of our business comes from a long-term policy. It's steady. We've not changed our strategy on long-term policies.
Got that. You know, we have seen a phenomenal growth for the industry, in the, in the, you know, in the second half of this year, in FY 2026. You know, on that base, you know, what kind of growth momentum should we see a normalized level growth of, you know, for the industry, which will stabilize at about 20%? Just thoughts out there, you know, once this base comes into picture, how should we think about growth for the industry, you know, over medium term?
At least our view on this has not changed, Priyesh, which is that, you know, on the retail side, 17%-19% CAGR if you take a five-year view. Broadly, that's where we think the industry growth rate will continue to be at.
Okay. The last question is on the, you know, channel mix. You know, banca is again has been at the, you know, regulators' key focus areas. Banca recently contributes to our premium. Do you see any challenge there in the medium term?
No. In fact, what we have today is a very diversified channel mix. In fact, if you would look at the numbers, our overall agency mix has gone up by 1.5%, banca remaining a little lesser than what our own overall digital business has gone up in terms of our overall mix. We feel, one of the changes exposure draft had already been there from RBI. This is that there are no changes which are happening on the banca side. Commission sides, I don't think so much change will happen on the business, so to say, specifically because we have large amount of retail business coming, which we are sourcing along with the bank, which should not change there.
In fact, our growth rate on retail business on bank is around 46% new business. We have been consistently doing that.
I mean, just to add, Priyesh, to what Ankur said, one is of course with banks you know, our emphasis is on retail through either branch banking or tele. Asset is cross-sell, you know, so the point which Ankur made on RBI guidelines, since a lot of what we do on asset is cross-sell, again, to that extent it is de-risked.
Got that. Thank you and wish you all the best.
Thank you. Next question is from the line of Sanket Godha from Avendus Spark. Please proceed.
Thank you for the opportunity. The first question, Vishwa, if you can quantify your group health loss ratio for the year or the quarter would be useful. Second is whether in the fourth quarter there is any change in group health mix towards more indemnity? uncertain your EOM compliance related to complete nine months. Lastly, if from an IFRS point of view, if you can give your outstanding DAC number in the balance sheet, broken down into both retail and group, if possible.
Second, first, group health loss ratio is around 60.5% for the year FY 2026. The actually entire IFRS accounts along with annexures and schedules will be available on our website most probably next week. There we'll have all those details which you have mentioned in third question. What was the second question again?
Second was more on group health composition whether it has changed in the fourth quarter. Typically we have two-third, one-third. That is one-third is corporate health-
Yeah.
Two-third is retail, sorry, bank-based health. Whether that number has changed or it is broadly the same?
Similar. No changes as such. Similar to what it was in previous years as well and the earlier quarters.
Understood. Understood. Lastly, if you can, maybe we're just wondering, there is a kind of improvement in the retail health loss ratio every quarter. Basically it is better around 66.8%, and it has been improving every quarter from when you reported in 1H, it was 68.1%, then 66.9%, and 66.8%. Anything to read there whether this trend will continue? Is it more to do that you are growing a little more new business and mix changing in the favor of new is driving that number?
In general, have you seen frequencies, severities, or even your claim management from hospital point of view played a role for this consistent improvement from 1H to FY 2026?
Sanket, one is, this is Krishnan. I'll request Vishwanath and Nav to add. Broadly, there is seasonality to our claims ratio driven by the post-monsoon infections. Actually broadly, the way I would characterize our approach to claims ratio in general and specifically retail is, you know, we do have a plan that we work off, right? That plan, as Vishwanath often says, does factor in for, you know, basis points-
worsening, if you will, on retail claim ratio, but more than compensated by operating leverage.
Yeah.
Broadly, you know, we are fairly comfortable with the level at which we are operating. And we, you know, in terms of target, I don't think we wanna target the claims ratio that operates below where we are because, you know, you also have to understand that, you know, there has to be value to customer.
There's a lot of regulatory and policy, you know, oversight around making sure that products are affordable, there's value to customer, et cetera, et cetera. We are quite comfortable with where this is operating. And in terms of the underlying incidence rates, claim sizes, all of those, you know, are in line with our plan assumptions. That's how I would characterize it.
No, sir, the reason I asked that is that, maybe on year-on-year basis it deteriorated a bit. I understand there is seasonality. Given deterioration is not that huge, but the kind of saving we made on cost is meaningfully very high. I understand that point that on renewal the costs are significantly very low compared to loss. Overall combined might not change. Eventually you ended up reporting a better combined. Just wanted to understand whether the quality of loss ratio compared to what you wrote last year, in general in the product is improving or it is sheerly because the new grew very fast and that led to that improvement. Because, you know, OpEx also improved along with it.
That is the reason I was asking that question.
In terms of quality, you know, our approach has been consistently around driving a lifetime value approach to every policy we write. In terms of quality, nothing significant to indicate. The quality only continues to get refined and improve over time, Sanket.
Understood. Understood. Lastly, I don't know whether you will be comfortable giving this data point or not. Out of the total INR 6,582 crores of retail health, how much is fresh? Within that fresh, how much is long term?
Look, in terms of new, let me call it new and renewal, that mix is roughly 40, 60. In terms of port, that ratio has been stable, between 20% and 25%.
Understood. In that 40 of fresh, how much would be long term? You said for the overall premium it is 20. Just wanted to cut on fresh long term.
Broadly in that ballpark only, Sanket.
Okay. Understood. Okay. Okay. Okay. Thanks. Thanks for your answers. That's it from my side.
Thank you. Before we move to the next question, a reminder to the participants, to ask a question, you may press star and one. Next question is from the line of Hitaindra Pradhan from Maximal Capital. Please go ahead.
Hi, sir. I hope I'm audible. Sir, my question is again on the same as per the previous participant. I mean, because, you know, the growth is also led by the fresh kind of premiums. Just wanted to understand, you know, how the renewal book is performing in terms of claims ratio. I mean, those vintages, what has been the performance in terms of the claims ratio?
Overall renewal, book we can share with you, and, we have shared earlier also that the combined ratio of renewal book, is more like 97%, 98%. We are comfortable with that number. That's been steady, this year, last year. That's something that we can share.
Got it, sir. Sir, like you guided that the claims ratio would be more or less will be in the, you know, similar level going forward. Hence the question, I mean, because, you know, our growth is also led by, you know, fresh premiums. Can we, you know, see that kind of, you know, inching up, you know, going forward also? You know, that's why the question.
Yeah.
Yes, I will, you know, wait for your data and all. Sir, the second question is on the expense ratio you mentioned, like, the benefit will come from the expense ratio side, that would be in the order of 2% to 2.5%. What are the levers, sir, for those improvement that would be on operating leverage side or, you know, something else if you want to comment?
Yeah. two, three levers. One is, you know, the business mix change, like you also mentioned, new renewal. The renewal has much lower cost, both cost of acquisition and cost of administering policies. That's one lever. Second is sheer economies of scale. The overheads, fixed overheads, grow by inflation, let's say 6%, 7%, while GWP you have seen, we are growing it at, you know, at last year was 27%. That's second. Third, lot of investment has been made in technology, in analytics, GenAI. That's also something which is helping to bend the cost curve. These are the 3 major levers.
Got it, sir. The final one is on accounting. If you can, you know, just explain a bit on the IFRS NEP, like, accounting versus, you know, the NEP accounting as per 1/N. There seems to be like, you know, divergence, and, you know, if you can give some qualitative color on how to think about the NEP or the service revenue as per IFRS, I mean, that would be really helpful.
Sure. I can very broadly cover. Under IFRS, the top line is gross earned premium. They don't have net earned premium. It is gross earned premium and gross incurred claims and cost of acquisition as insurance service expense. And the entire cost of reinsurance is given in one line, which includes the premium we received, the earning on that.
It includes the commission we receive, again amortized. Third, the claims we receive or going to receive on that premium. This is how it works. We have insurance service revenue, which is equivalent to gross earned premium. Second is insurance service expense, which includes gross incurred claim and amortized commission or cost of acquisition. Third is cost of reinsurance, and that leads to insurance service result.
We have overheads, and investment results.
Got it. Okay, sir. Okay, sir. Thank you. That's all from my side.
Okay.
Thank you. Next question is from the line of Shobhit Sharma from HDFC Securities Limited. Please go ahead.
Yeah. Hi, sir. Thanks for the opportunity. I have three questions. Firstly is on your average ticket size. If I look at your average ticket size has grown by 4%, at the overall level, which is lower than the overall growth in the agency average ticket size. Just wanted to understand this at the channel level, as we've seen the 1/N. As you can see, our strategy in the long-term policy seems to have taken toll on this. One of your large distribution partner has been focusing more on the rider attachment increase in sum assured. Ideally this growth should have been in line with the agency channel growth, or should have been ideally higher.
What has led to this company level ATS being lower than the ATS growth being lower than the agency channel growth? Secondly, if I look at your number of lives, which has grown by a very good 25 odd %. Can you split that growth into retail and group businesses? Just wanted to see, understand that how much of the retail business growth has been driven by the new lives. Sir, lastly is on your IFRS numbers. If when I went through your nine months schedules, you had recognized losses from the onerous contracts on the group side. I'm assuming, you would have again recognized those losses on the 12 months number when the schedule comes out.
Can you help us understand what's our approach or the strategy on or the need for underwriting these onerous contracts?
Sure. Let me answer the first two questions, I'll ask Vish to answer the third one. Let me first attempt to answer the second question first. Overall growth for the organization was 35%, volume growth out of this is 24%. We have not just grown on value. Volume growth has been very consistently up, it is at 24%. On ticket size, on your question, you are relating it to some other data point, let me tell you one more data point. Last six months versus first six months, the ticket size has grown by almost 14.5%.
That's the big ticket size jump, largely contributed by GST, both on fresh business and renewal, which ultimately helps us with a better premium per life and helps us in better overall profitability for us. Has it grown in some channels? In all retail channels, it has grown consistently. Not looking at, you know, I do not have the split of channel wise. If you just look at the retail channels, all of our channels have grown in the ticket size, both on fresh and renewal business. I'll ask Vish to-
Yeah. Yeah.
Talk on the third point.
Sure. Again, just to add, the average ticket size and GWP per policy sold by agent, the difference is not only other channel, it is also group and retail. The first line is all put together, which is B2B, B2B2C. More relevant is GWP sold by agent, which is primarily which is actually retail. Ankur has anyways clarified the growth in ticket size. On 31st December, yes, there was loss component. Around equal amount was there last financial year also. As such, there is no impact of that in last financial year because previous financial year also similar number was there. There was no loss component in last quarter. In fact, if at all, it was unwound.
Vishwa, just wanted to understand what's our strategy? What is requiring us to write these onerous contracts?
Actually these, if we create a loss component on onerous contract, it is not necessarily that these are unprofitable. The concept is we need to consider expected loss ratio, all expenses and risk adjustment. Assume that you are writing an account at 100% core and investment income is your profit, let's say in this example. Still you need to create loss component, let's say if you are taking risk adjustment of 5%.
Anything which is less than 95% or above, you need to create loss component on that. It's not necessarily that this is loss-making. It is just that, IFRS says if, you know, it is after risk adjustment more than 100%, then you upfront create provision for that.
During the policy cycle, you keep unwinding that. That helps, Shobhit?
Yeah. Yeah. Thanks, Vishwa. Thank you.
Thank you. Next question is from the line of Nischint Chawathe from Kotak. Please go ahead.
Hi. You know, on the incurred claims, you know, amount of around INR 5,000 crore, can you break this between actual claims and claim management expenses?
Claims management expenses generally is 3% of 1/N GWP initially.
The ratio remains similar this year, is it?
Yeah, it's similar. Same. Just that number has changed.
Got it. If I now sort of look at the net claims ratio, that kind of moves up from around 59.4 to around 61.3 for the year. How should we read this ratio? How would you interpret this ratio and the rise and how do we see this going forward?
You are referring to IFRS numbers or?
IFRS. All IFRS numbers, yeah.
IFRS result, loss ratio.
Yes. I'm just saying look at net claims ratio, that is net of claim management expenses.
Yeah.
You know, that sort of moves on from 59.4 last year to 61.3. Yeah, sorry.
I think the better thing is to look at retail because, you know, the mix between retail and group can explain, you know, other changes.
If you looked at, retail per se, that's the better answer, explanation for you to give, Vishwanath.
Yeah. Which is not really increasing that much. It is similar. Just that in quarter four, yeah, the increase in reported number may be higher, but the way you are calculating, that should show very small increase, Nishchint.
Sure. Got it. The entire claims management, I mean, it has to be sort of apportioned equally, as in not equally on a pro rata basis between, you know, retail and corporate or will you kind of allocate everything to retail?
No, no. We allocate in the proportion of claims.
In the proportion of claims. Got it. Great. Thank you very much.
Thank you. Next question is from the line of Priyesh Jain from Motilal Oswal Financial Services. Please go ahead.
Hi. Thanks for the opportunity again. Just, you know, on the hospital bit you mentioned that, you know, I think some 2,000 plus hospitals have kind of empaneled on the various measures on protocols and infections, standard procedures for infections that have been taken. You know, are these large hospitals or could you give us some color as to, you know, what kind of hospitals have these tied up with any large chain has kind of come on board? Since the number is still too small, you know, what are the large chains talking about this and, when do you see the benefits of this kind of coming in for the industry and for Niva?
Priyesh as, you know, as I mentioned, when we first started this initiative, at broadly the common empanelment, what we wanted to drive as an industry is a critical mass of hospitals to be signed up. We consciously chose to leave out the top 20 groups. You know, maybe we will have a different strategy for the top 20 groups.
The emphasis is on outside of top 20 and 2,005 that I referred to, would, you know, would be outside of the top 20 odd. The idea is to get to maybe 5,000 in the next four, five months. We have ironed out all of the operational topics around common empanelment. We now have a tech platform, et cetera, et cetera.
In terms of benefits, look, the industry will to the extent that we have claims flow into these setups, the industry already is seeing benefits from this initiative, and also certainly benefits from the initiatives around standardization. As I mentioned, a good part of the cost when it comes to claims is captured on the care pathway.
The treatment choices that get made fundamentally determine what will be the length of stay and the average claim size. As we standardize that, you know, that is a significant positive impact to the industry. I just want to reemphasize how important that is. Dr. Bhabatosh Mishra wants to say something.
Yeah, Priyesh, thank you for your question. The first expectation and a big mandate is to enhance access to hospitals for every insured person. From that point of view, in phase 1, the mid-size and other hospitals have been focused on so that access goes up, because the top 20, as you know, are already a part of almost every insurer's network or TPA's network. It's the mid-segment where more focus has been done to enhance access to claimants insured population.
The protocols that Mr. Krishnan mentioned about and which you asked are applicable to all providers, whether, you know, across the length and breadth of segment of providers in the country, which basically in interest of consumer in bringing transparency, in getting right treatment for right conditions at right severity, it would be very beneficial to masses in general, and specifically it will also have a bearing on cost optimization when it comes to claim cost by rationalizing the treatment, optimizing the treatment protocols.
I mean, doc, maybe you can make that real, with robotic as an example, right?
Yeah. In robotic, for example, with advancement of modern medicine, robotic is available. Globally what is followed is very robust, what you call as health technology assessment or health economic evaluation. Basis that robotic gets incremental health benefits but at appropriate cost. When that protocols are applied globally and now increasingly in India, as we discussed and Mr. Krishnan mentioned earlier, would mean that how much incremental benefit robot usage against conventional laparoscopy usage in a particular surgery is gained, and what is an appropriate cost for that.
For the gain. In many surgeries you will find, for example, small surgeries like, you know, fibroid removal, et cetera, robot incrementally does not add much health benefits, but it comes at possibly significant cost, which is not appropriate to the benefit gained.
Those are the issues and protocols through HT and HEA that are getting addressed gradually.
Yeah, it does. Just a follow-up on that. Do you think this would lead to kind of, you know, more challenges with customers on the kind of treatment that the hospital would suggest and what or what the customer would want and what the insurance company is gonna settle for?
In fact, Priyesh, I think this is in interest of consumer mostly, because then the consumer would be very much aware that what is the appropriate care and treatment for him or her. Transparency in healthcare practices will set in helping consumers make the right health decisions for self.
And look-
This is something that's, you know, globally a journey that many mature markets, you know, now practice to a very large level of maturity. This is a journey that has begun in India. For example, the initiative on infections, where we standardized admission criteria for seven infections. You know, it has now been live for 9 months. And I think there's been a net benefit in terms of transparency. See, customers understand what customers don't want is surprise. I think this eliminates surprise, all sides, right? In all these initiatives, clearly there's communication out to hospitals, there's communication out to customers.
When there's a claim, you know, then, you know, there's less and less surprise when we take a position. Because, you know, everybody's been informed on why we are doing what we are doing. Then, of course, some customers may still choose to pay out of pocket and undergo a certain treatment, but then it's not a surprise.
Mm-hmm. Got that. That is helpful.
These are very evidence-based. There is enough and more literature even within the country that is available, and all these are based on very, very scientific evaluations by very appropriate government and non-government authorities.
Got that. Any development on the Ayushman Bharat Digital Mission that was, that was, you know, that was picking up some momentum until some time back. Now we don't hear anything about it. What's happening on that? In fact, that was supposed to help the, you know, outpatient insurance as well. Where is that and how is that kind of shaping up for the industry?
Thank you, Priyesh Jain. In fact, there is renewed focus and energy around some components in a phased manner on the Ayushman Bharat Digital Mission. I would perhaps give you an example of the National Health Claims Exchange, where both payers, providers have come together to adopt it in a meaningful, in a very big way. Those works with various industry bodies through the regulator and other agencies, including NHA, GIC is on. There is lot more work that is being done, which is likely to see very positive results fairly sooner than later.
Got that. Last question from, if I look at commissions on the Indian GAAP numbers, that commission ratio has come down sequentially in spite of the mix moving towards, retail health and fresh business. What explains that?
Largely this is towards two things. One, the senior, which we rolled out from 1st of April last year, the reduction in commission on the senior. Second is on the GST impact as well. Both of these are the reasons why this has gone down.
Okay. Thank you.
Thank you. Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference over to the management for the closing comments.
Thank you very much. Appreciate you taking time on a Friday evening, and for all your questions. If there's anything further, please do feel free to get in touch with us through Himanshu. Happy to address any further questions any of you may have. Thank you once more and have a happy week.
Thank you, sir. On behalf of ICICI Securities, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.