Cigna International, a US-based health insurance company, is negotiating with Chennai-based TTK group to set up a health insurance company. The partners are expected to announce the joint venture early next week and approach the Insurance Regulatory and Development Authority very soon.
A source close to the development said that the company will start with an initial capital of Rs 100 crore.
Under Indian laws, foreign partners can own 26% of Indian insurers.
A legislation to raise the foreign direct investment limit in the insurance sector to 49% is pending before a parliamentary standing committee. Cigna has been looking to enter the Indian market for some years, but was unable to find a suitable partner.
The TTK group, which offers third party administrator or TPA services, will have to exit from that business.
TPAs act as intermediaries between patients and health insurance companies by processing insurance claims.
TTK's presence in the TPA business could help the company because of its access to a large database.
The health insurance industry is expected to grow by over 20% over the next few years. Only 0.5 % of the population has bought health insurance, while around 8% of the population is covered by government schemes, leaving over 90% of the population with no health insurance cover. The TTK group, set up in 1928, is present in a number of industries such as kitchen appliances, textiles and condoms.
