Apollo Hospitals' Bold Insurance Move: Digital Powerhouse Targets Profitability!

Apollo Hospitals Enterprise Ltd (AHEL) is significantly expanding its insurance operations via the Apollo 24/7 platform. Launched in mid-2025, the insurance vertical, currently active in NCR and Hyderabad, is experiencing "very good traction." The strategy centers on a digital-first approach, supported by a 500-seat call centre (300 operational) to assist customers, particularly with higher-value policies, while eschewing field-based selling. An EMI-driven model is being promoted to make premiums more accessible.

The company plans to leverage its vast Apollo 24/7 user base of 4.4 crore registered users and over 1 crore high-value customers for initial sales. While small-ticket insurance items are sold well online, larger premiums (Rs 20,000-30,000) require customer assistance, which the call centre will provide. The focus is primarily on health insurance, with pilots underway for life and wellness products. Additionally, micro-insurance products like vector and personal accident covers may be piloted through around 1,000 of its 7,000 pharmacies using the POSP model.

Although the insurance business currently contributes a small portion to Apollo 24/7's Gross Merchandise Volume (GMV), management anticipates substantial scaling from Q4 FY26 as Gross Written Premium (GWP) grows. Apollo 24/7 maintains its target of 25-30 percent annual growth. The company aims for cost breakeven for Apollo 24/7 by end-FY26, though incremental investment in insurance may cause a "hiccup." However, insurance is expected to disproportionately contribute to profitability post-breakeven.

Impact This news is highly relevant for investors as Apollo Hospitals is diversifying its revenue streams and leveraging its digital ecosystem to capture growth in the insurance sector. The success of this initiative could significantly bolster the financial performance of Apollo 24/7 and the broader company. However, increased investment in insurance might slightly push back the breakeven timeline for the digital vertical. Rating: 7/10