How Kenko Health is moving beyond health insurance to offer comprehensive healthcare solutions for India

Realising that insurance is just one part of healthcare, Kenko Health is now building a unique, holistic package for its subscribers

This August, Indian healthcare finance startup Kenko Health closed a pre-Series A round of $1.7 million, backed by BEENEXT and Orios as co-lead investors, and with participation from Accelerator VC, 9Unicorns, and Waveform Ventures.

Even as Kenko Health continues meeting investors for a Series A round, the funds raised so far will help the company chart an ambitious path. Quite simply, Kenko Health aims to become a one stop shop for healthcare in India. It currently offers financing solutions for the largely-untapped “missing middle” of the Indian population, covering a bevy of health services from complex surgeries to doctor consultations and everything in between. Over time, Kenko Health will go beyond simply paying for the expenses. It will curate and offer services intricately tied to its subscription plans, which also include financing. The offering is set to expand to incorporate everything from dental health, to mental health and sexual wellness. All of this is available for a relatively modest monthly asking price of Rs 299 ($4 approximately) a month, ranging all the way up to a full-family pack at Rs 1,999 ($27) a month, with an increasing number of benefits for each tier. The packages are also finding takers among small and medium enterprises, who previously couldn’t afford to offer their employees healthcare benefits.

While Kenko Health began operations in 2019, two waves of the COVID-19 pandemic have been an inflection point. Insurance penetration in India has traditionally been low. Life insurance accounted for 3.2% and non-life insurance cornered a mere 1% according to figures from the Indian Brand Equity Foundation, a government-backed trust. Within non-life insurance, health has the lion’s share and grew by 41% in March 2021, against the backdrop of the pandemic.

Going beyond health insurance

However, too sharp a focus on this segment is missing the forest for the trees. Medical expenses unaccounted for by health insurance stand at $380 billion in India, according to estimates from Kenko Health. $300 billion of this is out-patient expenses alone, which have no structured financing options — insurance or otherwise. The pressing need is for a solution that covers all aspects of health expenses while at the same time, creating an ecosystem to make those services available at the convenience of a finger-tap.

Kenko Health’s co-founders Aniruddha Sen and Dhiraj Goel initially thought of creating such a solution while employed at insurance firm CignaTTK. However, they discovered that a corporate was perhaps not the best backer. Sen said, “It was slow and there was inertia. The system believes there are no problems in the space – so why fix what isn’t broken?”

Having made a fresh start, Kenko Health is relying on the pedigree and expertise of its founders to build a comprehensive package. It involves partnering with insurance firms on one hand and healthcare specialist startups on the other. Kenko Health buys an insurance policy which it offers gratis to the consumer. It also brings aboard startups who are either disrupting a certain vertical within healthcare, or creating convenient access to a specialist service. For instance, the hyperlocal delivery of medicines or a chain of dentists, where the prices are regularised, with properly qualified staff — participants insurance firms would typically not consider.

This asset light model means Kenko Health does not have to create its own chain of services or acquire preexisting networks. So far, its product level partners include Sabka Dentist, Medulance, Medplay, Hospals, MyDentalPlan, Mindpeers, Sova Health and Nova Benefits with more such associations in the works.

Building an active subscriber base

Subscribers come to Kenko Health via multiple channels. It grants them access to a suite of services that would otherwise require multiple relationships with different companies. Sen said, “In healthcare financing, you can bring the entire family onboard due to the strong dynamics at play. In India, there’s usually a doctor and a local pharmacy who serve an entire family. All you have to do is to convince one member to shift online while buying medicines or consulting a physician.”

Consumers looking for insurance or healthcare options, find their way to Kenko Health via their smartphones. The consumers who usually reside in tier II cities in India, make instinctive purchases. Sen said, “They’ve been looking for insurance but can’t afford it. Then they see our products, speak to someone at the press of a button, and realise it is only Rs 300 ($4) to Rs 500 ($6) a month; that they can sample and opt out easily if dissatisfied. It’s becoming very close to a consumer good or discretionary purchase.”

Other key channels are large offline brokers, and partners in fintech companies. Sen said, “Their consumers believe it’s a great proposition. The best of both worlds with consultation and hospitalisation coverage in the same plan. Staggered payments mean they don’t have to pay upfront for a full year. What’s not to like? All we are limited by is our reach and ability to create awareness.”

Kenko Health has over 22,000 individuals on its plans including corporate customers from SMEs. It has been adding around 10,000 people every month and has only a 3% to 4% attrition rate. Sen expects the offtake to increase from January to March – typically the insurance buying quarter, which he hopes will rub off on Kenko Health as an adjacent product.

A compelling movement for insurers

Fundraising has brought its share of challenges for Kenko Health. Prominent among these: being able to spin a narrative around the future of the company. Sen said, “Both my co-founder and I have several years of experience running operations. But we seem to lack storytelling experience. Had I known that it would be so important, we would have brushed up on those skills.”

The other problem stems from potential investors being unable to grasp the model. The only parallel that Sen could think of is Vitality by South African fintech firm Discovery. He said, “Insurance is a black box. Healthcare is easier to understand. But tech plus healthcare plus finance is a new concept. As a result, it takes time for people to align.”

However, the business case for Kenko Health’s offering is very compelling. Sen said, “When 600 million to 700 million people start buying these solutions, investors can’t afford to miss out. A trend this big doesn’t happen every day, and there aren’t too many countries which can offer consistent growth.”

What comes next for Kenko Health

Kenko Health still has 75% of its fundraise – 25% has been deployed to build the platform and put a team together. Staff strength has increased from three to 75 in five months. From a rudimentary website, Kenko Health now has two large properties, with apps dedicated to iOS and to the HR function at companies, on the way. Sen said, “Funds from Series A will go towards creating awareness: building brand identity, picking up pace on direct-to-consumer and establishing a second line of leadership. And finally, completing the product proposition with multiple partnerships including non-banking financial companies: medical loans or other financial products.”

Kenko Health is open to partnering with government and quasi government bodies, and even defense agencies. A longer-term project involves working with insurance partners to redo the hospital claim experience, making it more in line with Kenko Health’s overall offering.

Sen said, “At present, it may be ludicrous telling people that your insurance company pays for your child’s diapers. But by next year, it might be commonplace. There was an old slogan for a paint company Jenson & Nicholson – ‘whenever you see colour, think of us.’ What we’d like is to say is, ‘whenever you see health, think of us.’”

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The above article was created in partnership with Kenko Health. Sign up for our next webinar scheduled for November 15, 2021 at 2 pm SGT to hear speakers from Vertex Ventures, Sequoia, the World Bank and Kenko Health discuss the creation of health solutions for emerging markets in a post-pandemic world