Re-insurance firm Swiss Re is selling its entire 26% stake in third party administration firm TTK Healthcare TPA Private Ltd to Vidal Healthcare Services

Swiss Re-insurance company, Swiss Re, reported that it is selling its 26% controlling stake in TTK Healthcare TPA Private Ltd, a third party administration company. According to the announcement, Swiss Re will be offloading its entire stake in the firm to Vidal Healthcare Services.

Swiss Re reiterated that the move is aimed at enabling it shift its focus to the re-insurance business in India. However, the transaction is still subject to regulatory approval. Vidal Healthcare expects to take advantage of the opportunities that will arise from the healthcare sector.

The TTK Healthcare TPA Private Ltd group was established eight years ago and is part of the larger Bangalore based TTKHTPA group that was formerly known as TTK Healthcare Services Pvt Ltd. The firm offers third party administration services linked to Indian medical and health insurance policies.

On its part, Vidal was set up by Girish Rao as its majority owner. The firm has subsequently built itself into one of India’s foremost third party administration companies. Swiss Reinsurance is based in Zurich, Switzerland and is the second biggest insurer globally. Its growth has been marked by acquisition investments, with the takeover of GE Insurance Solutions in 2006.

The Swiss firm operates in more than 26 countries and sells reinsurance for property, casualty, life and health business. However, the firm has had an Indian presence since 1998, operating as Swiss Re Shared Services (India) Pvt Ltd in Bangalore. In 2002, it opened a service company in Mumbai to offer support to Swiss Re Zurich’s reinsurance activities.

Swiss Re acquired a stake in TTKHTPA in December 2006 from India Value Funds Advisors (IVF). Speculation had initially emerged that Reliance Life was in talks to bring in the Swiss firm as a foreign partner in the firm by selling it its 26% stake.

Third Party Administration firms, typically stationed in hospitals, are entities to which insurers outsource servicing of health claims. Once insurance companies issue the policy, most of the back office work, including networking with healthcare providers, is undertaken by TPAs. In return, the firms get around 5% of the premium as fees.

Recently TPAs have complained to the Competition Commission of India (CCI) against four government-owned insurance companies that have set up their own TPAs. Complains have also been over the forming of a cartel and abusing their dominant market position by having a TPA outfit of their own.

8 Sep 2010.