Medi Assist Healthcare Services Ltd Management Discussions

Indian Economy

During the year under review, the Indian economy sustained growth while navigating a period of global economic volatility. India continued to be one of the fastest-growing major economies, with GDP projected to grow by 6.5% in FY25. Inflation moderated from 5.4% in FY24 to 4.9% in FY25, supporting improved consumer sentiment and stimulating expenditure, especially within rural markets. Growth in rural consumption and a notable increase in investment activity characterised the reporting period. Momentum in capital formation reflects a favourable business environment, shaped by timely government interventions and targeted policy measures. The Production-Linked Incentive scheme, alongside the adoption of the China plus one strategy by global businesses, contributed to the comprehensive development of multiple industry sectors. Foreign direct investment inflows reached USD 55.6 billion in FY25, exceeding the previous years figures and supporting economic growth and industrial development. The continued focus on investment, accompanied by increased public expenditure, has underpinned positive economic prospects. Revisions to income tax slabs are further anticipated to raise disposable incomes, which may further support private consumption.

The Reserve Bank of India reduced the repo rate to 6.25% in February 2025, with a further cut to 6% in April. These efforts were taken to spur investment and economic activity, while striving for price stability. External accounts remained stable, with the current account deficit contained at 1.10% of GDP in 2024-25, a slight increase compared to 0.70% in the prior fiscal year. Strong financial inflows and a steady services trade surplus helped mitigate the impact of foreign portfolio outflows and currency fluctuations. While domestic investment, easing inflation, and timely policy measures enhanced Indias ability to maintain momentum, external challenges remained.

Indian Healthcare Sector

Indias healthcare sector has emerged as one of the nations most significant industries in terms of both revenue generation and employment. The total market size reached over $370 billion in 2022. The post-pandemic period saw the sectors scale rise from approximately $280 billion in 2020 to $440 billion in 2023, representing an estimated annual growth of 16%. This accelerated trajectory has been driven by increased demand for quality healthcare, rising private and public investment, and rapid adoption of digital health solutions.

Current healthcare industry landscape in India

Although Indias healthcare sector has grown rapidly over the last few years, persistent challenges such as a weak health system, lack of quality infrastructure, and lack of quality service delivery to vulnerable populations, continues to exist. Indias healthcare expenditure stands at approximately 3.3% of GDP, a proportion that remains notably lower than the global average and significantly behind countries such as the United States (16.6%), Germany (12.7%), France (12.3%), and Brazil (9.9%). This measured investment translates to per capita healthcare spending that is among the lowest in the BRICS nation. The investment in 2022 stood at approximately USD 79.5 per person, compared to USD 848.6 in Brazil, USD 1,078.2 in Russia, USD 672.5 in China, and USD 569.8 in South Africa. Despite being one of the fastest-growing healthcare markets, the sector faces challenges in meeting the demands of a large and diverse population, particularly in rural and semi-urban regions.

A key consequence of limited healthcare expenditure is the persistent gap in infrastructure development. Many regions continue to experience shortages of hospital beds, diagnostic facilities, and skilled healthcare professionals. The density of doctors and nurses per 1,000 population remains below World Health Organization recommendations at 1:834 as per the National Medical Commission, and the distribution of healthcare resources is uneven across states. These constraints have led to increased reliance on private healthcare providers, who account for a significant share of service delivery.

The interplay between inadequate infrastructure and rising demand has contributed to elevated costs of care. Insufficient public facilities often result in patients seeking treatment from private providers, where higher input costs and capital investments are reflected in medical bills. This dynamic, combined with advances in medical technology and the growing burden of diseases, has fuelled persistent medical inflation in India, outpacing general inflation rates and placing additional pressure on household finances.

This situation is particularly challenging for vulnerable populations, often resulting in limited access to timely and quality healthcare, especially in rural and semi-urban areas. The predominance of such direct expenses signals a pressing need for enhanced investment and comprehensive insurance coverage. Furthermore, much of the current spending is directed towards curative care and repeat outpatient visits, rather than preventive interventions that could lower long-term costs and hospital admissions. Addressing these imbalances by increasing public investment and expanding preventive care initiatives is imperative to alleviating the burden on ordinary citizens and open significant opportunities for sector growth. Consequently, there remains substantial scope for investment and innovation, which can bolster the sectors capacity and contribute towards building a more resilient and accessible healthcare system for all.

Key Growth Drivers of Indian Healthcare Sector

Demographic Changes

Indias vast and growing population of 1.4 billion with an expanding elderly cohort which causes a rising need for age-related care provides the demographic tailwind that ensures a large and sustained healthcare market.

Infrastructure Gaps and Opportunities

Hospital capacity remains unevenly distributed, with only seven states accounting for about 65% of Indias hospital beds while roughly half the population lives outside these states. This clear supply–demand mismatch is prompting both public and private sectors to expand hospitals, clinics and diagnostic centres.

Technology Adoption and Digital Health

Rapid adoption of digital health solutions is transforming care delivery and widening access. Telemedicine and mobile health services are bridging geographic barriers by bringing medical advice and monitoring to remote areas. Digital platforms focused on electronic health records, health apps and AI-driven analytics also enable more cost-effective and preventive care, helping mitigate rising healthcare costs through early intervention and efficiency gains. This tech-driven evolution is improving healthcare quality and reach across India.

Government Initiatives and Policy Support

Public healthcare spending, though currently around 1.3% of GDP; the lowest among BRICS nations, is targeted to increase by end of 2025. The government has launched initiatives like the Ayushman Bharat Digital Mission in 2021 to integrate health systems nationwide, alongside expanding medical education and public hospital networks. These measures aim to address infrastructure gaps, enhance service delivery, and catalyse further investment in health.

Rising Investment Trends

Under-penetration of healthcare has attracted robust investor interest. Institutional investors, including global private equity and venture funds, are making steady inroads to capitalise on Indias healthcare needs. This influx of capital is visible in the cumulative investments since 2019, with hospitals and clinics attracting 8,257 million dollars across ninety-eight deals. Healthcare technology has also seen strong activity, with two hundred and four deals amounting to 3,112 million dollars. These investments are financing new hospitals, specialist clinics, and innovative healthtech start-ups, thereby accelerating the sectors growth and modernisation.

Health Insurance Sector Overview

During FY25, general and health insurance companies recorded health insurance premium collections of

1,08,110 crore (Group + Retail), representing a growth of 8.97%% over the previous year.

Public Sector General Insurers Private Sector General Insurers Stand-alone Health Insurers Industry Total

Classification of Health

Insurance Business

In FY24, general and health insurance companies provided coverage to 57 crore lives through the issuance of 2.68 crore health insurance policies, exclusive of policies issued under Personal Accident and Travel Insurance. Health insurance business is categorised into three principal segments; government-sponsored schemes, group business, and individual policies. In terms of the number of lives insured, approximately 45% were covered under government-sponsored health insurance schemes, with a further 45% insured through group business. The remaining 10% of lives were covered by individual policies issued by general and health insurers.

Policies, Lives Covered and Premium under Health Insurance Business of General and Health Insurers

	No. of Policies (lakh)		No. of Lives Covered (lakh)
Class of Business	2022-23	2023-24	2022-23	2023-24
Government Sponsored Business	0.001	0.00	2,977.48	2,611,04
	(0.00)	(0.00)	-2.86%	(-12.31)
Group Business	6.50	37.29	1,993.97	2,559.09
	(-7.07)	(473.69)	22.87%	(28.34)
Individual Business	219.92	230.99	528.91	558.57
	(0.31)	(5.03)	2.46%	(5.61)
Total	226.42	268.29	5,500.36	5,728.71
	(0.08)	(18.49)	5.69%	(4.15)

From a premium perspective, group business accounted for the largest share at 51.68%, followed by individual business at 38.55%, and government business at 9.77%.

Rising Imperative of Health Insurance

According to a report by Aon on Global Medical Trends, India continues to experience one of the highest rates of medical inflation globally, with data highlighting the countrys unique position among both developed and emerging markets. In 2024, the gross medical trend for India stood at 12%, rising further to 13% in 2025. These figures are markedly higher than those recorded in other major economies, where gross medical inflation rates for 2024 ranged from 0.4% in Japan to 15% in the United Kingdom, with most countries reporting single-digit trends.

Annual Medical Trends Rates in Asia Pacific

	2024	2024	2024	2025	2025	2025
Country	General Inflation Rate (%)	Medical Trend Rate (%) (Gross)	Medical Trend Rate (%) (Net)	General Inflation Rate (%)	Medical Trend Rate (%) (Gross)	Medical Trend Rate (%) (Net)
Asia-Pacific	3.6	9.7	6.1	2.8	11.1	8.3
Australia	3.2	4.2	1.0	3.0	5.1	2.1
Bangladesh	6.5	10.0	3.5	6.1	10.0	3.9
China	2.2	7.9	5.7	2.0	8.0	6.0
Hong Kong	2.4	7.5	5.1	2.3	8.0	5.7
India	4.4	12.0	7.6	4.2	13.0	8.8
Indonesia	3.0	13.1	10.1	2.6	16.2	13.6
Japan	2.2	0.4	–1.8	2.1	0.9	–1.2
Kazakhstan	8.5	30.0	21.5	7.0	29.0	22.0
Malaysia	3.1	15.0	11.9	2.5	15.0	12.5
Mongolia	8.8	15.0	6.2	10.0	n/a	n/a
New Zealand	2.6	10.0	7.4	2.5	17.0	14.5
Pakistan	21.9	n/a	n/a	12.7	n/a	n/a
Papua New Guinea	4.9	4.9	0.0	4.8	12.0	7.2
Philippines	3.2	14.0	10.8	3.0	15.0	12.0
Singapore	3.5	13.0	9.5	2.5	14.0	11.5
South Korea	2.3	10.0	7.7	2.0	10.0	8.0
Taiwan	1.7	10.0	8.3	1.6	n/a	n/a
Thailand	2.0	9.1	7.1	1.2	14.3	13.1
Vietnam	4.3	6.7	2.4	3.4	12.9	9.5
Source: Aon

Key Drivers of Medical Inflation

Several structural factors underpin Indias elevated medical inflation:

Rising Hospital & Treatment Costs Hospitals are increasingly raising the cost of services, room rents, and doctor consultation fees, which form the largest component of medical inflation in India

Growing Burden of Chronic Diseases The prevalence of non-communicable diseases such as diabetes, cardiovascular conditions, and cancer has driven up the demand for long-term and recurrent care.

Healthcare Infrastructure Constraints Limited public sector capacity and workforce shortages have resulted in greater reliance on private providers, where higher operating costs are often passed on to patients.

Impact on Healthcare Outcomes

The sustained rise in medical costs has had a profound impact on healthcare outcomes in India

Increased Out-of-Pocket Expenditure Approximately 45% of total health spending is borne directly by households, making India one of the highest globally for out-of-pocket healthcare payments. This has led to financial strain, with a significant proportion of families resorting to borrowing or liquidating assets to fund medical expenses.

Delayed or Foregone Care

High treatment costs have resulted in some patients postponing or foregoing necessary care, which can adversely affect health outcomes and increase the risk of complications.

Pressure on Public Health Systems Overcrowded public facilities and resource constraints have limited the availability of subsidised care, further shifting the burden to private providers and exacerbating cost pressures.

Rising Insurance Premiums

Health insurers have experienced higher claims outgo, leading to premium increases and product adjustments. This cycle of rising costs and premiums has implications for both affordability and insurance penetration.

The Future of Health Insurance in India: Size & Scale

Indias health insurance sector stands at a transformative inflection point, driven by escalating medical costs, regulatory reforms, and an ambitious vision for universal coverage. The industry has recorded remarkable growth with health insurance premiums reaching 1,08,110 crore in FY25, representing an 8.97% increase over the previous year.

The industrys growth story over recent years has been remarkable. Between FY 2020 and FY 2024, total premiums across life and non-life segments increased from 7.8 lakh crore to

11.2 lakh crore. This strong double-digit growth provides the foundation for ambitious future projections estimating the sector could reach

25 lakh crore by 2030.

Understanding the Coverage Gap

While government-sponsored schemes such as Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (PM-JAY) have successfully extended coverage to economically vulnerable groups, and employer-sponsored or private insurance products serve formal sector employees and higher-income individuals, a considerable segment of the population remains uninsured. Indias health insurance landscape is marked by a profound protection gap, particularly within the "Missing Middle." This segment, comprising approximately 40 crore individuals, including informal sector workers and self-employed individuals who are neither eligible for government-subsidised schemes nor able to afford private health cover. The missing middle sits between two ends of the spectrum: low-income households with access to government support and high-income households covered by employer or private voluntary schemes. As depicted above, twenty-five percent of the population remains entirely without coverage, and much of the formal coverage for the remainder is insufficient given modern healthcare needs.

A significant share of those technically insured remain critically under-insured. Research from 2025 highlights that 75% of health insurance policyholders in India have cover amounts of less than ten lakh, while the majority of hospitalisation expenses can easily surpass these limits. As a consequence, nearly half of insured individuals are burdened with policies that are inadequate to protect them against potential expenditure.

This under-insurance is further exacerbated by an ongoing increase in healthcare costs and the persistent rise of out-of-pocket spending. Notwithstanding recent improvements, out-of-pocket expenditure continues to make up a substantial proportion of total health expenditure, leaving many families exposed to financial distress in the event of illness or hospitalisation.

This under-penetration and under-insurance reflect both a vulnerability and a large untapped commercial opportunity. Bridging the coverage gap for the missing middle is imperative, not only for increasing national health resilience but also for delivering on the broader vision of universal and inclusive health insurance in India.

Government initiatives in recent years have recognised and begun to address this imperative. Ayushman Bharat Pradhan Mantri Jan Arogya Yojana remains the worlds largest publicly funded health insurance scheme, while policy reforms such as streamlined product offerings, targeted awareness campaigns, and regulatory support for blended financing and digital infrastructure, aim to drive greater accessibility, affordability, and uptake. The Union Government, through the IRDAI, has also set an ambitious target of "Insurance for All" by 2047, further supporting sectoral growth and innovation.

Recognising the challenge posed by the uninsured "missing middle," the Government of India has launched several initiatives to broaden health insurance coverage.

Recent Regulatory Developments

The Indian health insurance sector has undergone significant regulatory transformation during FY23–25, with reforms aimed at enhancing policyholder protection and improving operational efficiency. Key Regulatory Reforms

Cashless Everywhere" Initiative

Launched in January 2024 by the General Insurance Council in collaboration with insurers, the "Cashless Everywhere" initiative enables policyholders to access cashless hospitalisation at any hospital nationwide, irrespective of network status. Policyholders who pre-inform the insurer (48 hours prior for elective or within 48 hours for emergency admissions) may avail treatment without upfront payment, subject to policy terms. This measure simplifies claims procedures and strengthens trust in health insurance.

AYUSH Treatment Coverage Parity

In January 2024, the Insurance Regulatory and Development Authority of India (IRDAI) mandated that all health insurers provide coverage for AYUSH treatments (Ayurveda, Yoga & Naturopathy, Unani, Siddha, Homeopathy) on par with allopathic care. Insurers are required to empanel AYUSH hospitals, establish standard treatment protocols, and integrate AYUSH into their hospital networks to facilitate cashless claims. This directive, effective

April 2024, ensures comprehensive coverage for alternative treatments.

Regulatory Sandbox Expansion

To promote innovation, IRDAI expanded its Regulatory Sandbox framework in January 2025. The revised regulations adopt a principles-based approach and permit inter-regulatory sandbox experiments across financial sectors. This extension supports insurers and InsurTechs in piloting new products and services under relaxed regulatory conditions, reinforcing a dynamic, innovation-friendly environment.

Expenses of Management (EoM) Reforms

Effective April 2023, IRDAI introduced standardised caps on operating expenses: general insurers are limited to 30% of gross premium, while standalone health insurers are capped at 35%. Previous category-wise limits were removed, granting insurers flexibility provided overall expenses remain within the prescribed caps. Additional allowances are available for investments in rural business, government schemes, InsurTech, or consumer awareness.

In January 2024, EoM and commission guidelines were unified for streamlined compliance, with ongoing requirements for board-approved business plans and cost policies to ensure expense efficiencies benefit

Long-Term Policy Continuity Norms IRDAI reinforced norms for long-term health insurance products to safeguard policyholders. For multi-year policies, insurers must honour original terms for existing policyholders throughout the policy duration, even if the product is withdrawn from new sales. The moratorium period for contesting claims due to past nondisclosure has been reduced from eight to five years, and waiting periods for pre-existing diseases are now capped at three years. These measures enhance stability and consumer confidence in long-term coverage

Digital Integration with National Health Systems

A major regulatory focus has been the integration of insurers with Indias digital health infrastructure. From June 2023, insurers have been required to capture the Ayushman Bharat Health Account (ABHA) number for every insured individual and obtain consent to access medical records through national digital health systems. Insurers are also onboarding the National Health Claims Exchange (NHCX), which standardises electronic claims data exchange among hospitals, TPAs, and insurers. By

August 2023, significant progress had been made towards integrating insurers and TPAs with the Ayushman Bharat Digital Mission, enabling digital health ID creation and policy linkage.

Government Initiatives

Ayushman Bharat (PM-JAY) Expansion The Government of India has continued to strengthen the Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (PM-JAY), the worlds largest health assurance scheme. As of November 2024, nearly 360 million beneficiaries had been verified.

In October 2024, the scheme was extended to all citizens aged 70 and above, regardless of income or socio-economic status, adding an estimated 45 million families (approximately 60 million senior individuals) to the insurance net. Eligibility was also expanded in March 2024 to include families of ASHA and Anganwadi workers. Many state health insurance programmes have converged with PM-JAY, collectively increasing the insured population and reducing out-of-pocket medical expenses for vulnerable groups.

Bima Sugam Digital Platform

FY25 saw significant progress on Bima Sugam, a comprehensive digital marketplace for insurance. Spearheaded by IRDAI with government backing, Bima Sugam is designed as a one-stop portal where customers can compare, purchase, and manage life, health, and general insurance policies. The first phase is scheduled for rollout in mid-2025.

The platform aims to democratise insurance distribution by onboarding all insurers and intermediaries, improving product accessibility, reducing acquisition costs, and supporting the Insurance for All mission. Integration with digital payment and KYC infrastructure is expected to boost online health insurance sales, particularly in smaller cities and underserved markets.

Digital Health Stack &

Unified Health Interface (UHI)

The central government has continued to develop the Ayushman Bharat Digital Mission (ABDM), a digital health backbone supporting insurance uptake. By late 2024, over 670 million unique ABHA IDs had been created, with more than 420 million health records linked. Key components, including the Unified Health Interface (UHI) and Health

Claims Exchange (HCX), have advanced towards nationwide implementation, streamlining electronic claim submissions. These initiatives are laying the foundation for seamless interoperability between healthcare providers and insurers, enabling real-time digital verification of coverage and claims processing, and enhancing service delivery and trust in the insurance system.

"Insurance for All by 2047" Vision

A long-term vision to achieve universal insurance coverage by 2047 underpins recent reforms. The Insurance for All by 2047" roadmap, articulated by IRDAI in 2023, seeks to ensure that every Indian has access to life, health, or general insurance by the nations centenary of independence. This ambition has led to the formation of state-level insurance committees and targeted awareness campaigns to reach untapped markets. In the health sector, the vision aligns with scaling public schemes such as PM-JAY and encourages insurers to develop affordable, accessible health covers for lower-income and rural populations.

Rising Healthcare Needs and the Role of TPAs

As Indias population becomes more health-conscious and medical treatment grows increasingly advanced and expensive driven by rising global burden of chronic diseases, the demand for reliable access to quality healthcare has never been greater. This rise in healthcare needs places a corresponding emphasis on comprehensive health insurance, which offers families and individuals a much-needed safety net against unforeseen medical expenses. However, as insurance coverage expands and policy structures become more elaborate, the process of administering these benefits efficiently and fairly becomes ever more complex. Here, Third-Party Administrators emerge as the linchpin connecting all participants in this evolving ecosystem. By ensuring claims are processed swiftly, benefits are managed transparently, and networks operate seamlessly, TPAs deliver the operational backbone that supports the entire health insurance value chain, transforming heightened healthcare needs into effective and trusted insurance coverage.

Evolution of the TPA Model in India

The TPA model, which originated in the United States during the 1970s to address the need for specialised health benefits administration, was formally introduced in India through egulations mandated by the IRDAI. Since its introduction, TPAs have emerged as an essential intermediary connecting insurers, policyholders and healthcare providers. They manage a range of functions including pre-authorisations, claims adjudication, provider network administration and member support services.

Growing Importance in a Complex Environment With the rising complexity of group health insurance, marked by diverse benefit structures, increasing claims volumes and multiple stakeholder interactions, the role of TPAs has gained greater significance. This complexity is further amplified by trends such as medical inflation and the rising risk of fraud, waste and abuse, all of which require specialised oversight. In this environment, TPAs streamline operational processes, ensure consistency in benefit administration and support faster claims turnaround across both group and retail portfolios.

Strategic Advantages of TPAs A key strength of TPAs lies in their ability to consolidate claims across multiple insurers, which enables them to negotiate favourable rates with hospital networks. These negotiated arrangements, particularly relevant in cashless settlements, contribute to cost containment for insurers while enhancing access and affordability for policyholders. In the group segment, TPAs also bring stability in service delivery. Employers often value the efficiency, hospital network depth and consistency of experience offered by TPAs, which leads to enduring associations even when insurers change.

Beyond claims handling, TPAs are responsible for broad network management, empanelment of hospitals and adoption of digital platforms that enable transparent and efficient claims processing. Their growing investment in analytics and fraud detection further strengthens risk control and operational resilience.

As the health insurance landscape continues to evolve, TPAs have progressed from being administrative facilitators to becoming strategic partners. Their contribution to cost efficiency, process standardisation and member satisfaction makes them integral to the sustainable growth of the health insurance ecosystem.

Market Opportunities

The global insurance Third Party Administrators (TPA) market is projected to grow from 28.6 lakh crore in 2024 to 31.5 lakh crore in 2025, reflecting a 10.3% year-on-year increase.

While regionally North America remains the largest market as of 2024, Asia-Pacific is expected to post the fastest growth through 2029. Global growth, primarily driven by insurance penetration, and increased operational outsourcing, particularly in the health insurance sector will enable the TPA market to grow at a compounded annual growth rate (CAGR) of 9.9% to reach 45.99 lakh crore by 2029¹.

Indias health insurance sector has experienced substantial growth, driven by escalating medical expenses, increased awareness among policyholders, and supportive government initiatives. Health insurance premiums underwritten exceeded 1 trillion in FY25, establishing the segment as a prominent contributor within the general insurance industry.

This growth has enhanced the strategic importance of Third- Party Administrators (TPAs), who now play a central role in enabling scale, operational efficiency, and trust across the insurance value chain².

Core Functions and Strategic

Evolution of Third Party Administrators

Third Party Administrators (TPAs) are licensed entities entrusted with a central role in the health insurance sector.

They operate as the crucial intermediary between insurers, healthcare providers, and policyholders, orchestrating the efficient administration of health benefits. TPAs are responsible for a broad spectrum of operational services, ensuring that insurance processes remain seamless, transparent, and compliant with regulatory standards.

Provider Support

• Establish and manage extensive hospital networks to facilitate cashless treatment for insured members

• Negotiate standardised treatment rates with hospitals, ensuring cost efficiency and quality benchmarks are maintained

• Coordinate with healthcare providers for claim approvals, billing processes, and timely settlements

• Monitor hospital performance, compliance with regulatory standards, and adherence to agreed protocols

Member Support

• Issue health cards to policyholders, enabling straightforward validation of insurance coverage at the point of care

• Operate 24/7 customer support helplines, providing guidance on claims, policy coverage, and network access

• Assist members with claim initiation, documentation requirements, and real-time status tracking

• Facilitate both cashless hospitalisation and reimbursement claims, ensuring a smooth experience for policyholders

• Conduct educational initiatives to enhance member awareness regarding policy benefits, claim procedures, and available services

Insurer Support

• Process and adjudicate claims efficiently, reducing turnaround times and ensuring regulatory compliance

• Maintain comprehensive records of insured individuals, claims history, and hospitalisation details

• Provide insurers with data analytics and detailed reporting to support underwriting, product design, and premium calculations

• Implement robust fraud detection and quality assurance measures to safeguard the integrity of the claims process

• Support insurers in meeting statutory and regulatory obligations through systematic administration and reporting

In addition to these core functions, TPAs in India also play a vital role in public health insurance schemes. They:

Facilitate the enrolment and identification of beneficiaries in government-sponsored health schemes, ensuring accurate database management.

Ensure claims processing is in accordance with government guidelines, adhering to stipulated timelines and package rates.

Empanel and monitor hospitals participating in public health schemes, ensuring quality standards and compliance.

Provide beneficiary support and grievance redressal services, assisting individuals in navigating scheme benefits and claim procedures.

Implement fraud control mechanisms and ensure transparency in scheme operations, supporting the efficient delivery of public healthcare services.

Benefits of Third-Party Administrators

(TPAs)

Benefits for Insurers

Operational Efficiency

Outsourcing claims processing and administrative functions to Third-Party Administrators (TPAs) enables insurers to enhance operational efficiency while achieving cost savings. By delegating routine tasks to TPAs, insurers streamline internal workflows, reduce overheads, and can focus more effectively on core areas such as product development and underwriting.

Fraud Prevention

TPAs employ advanced data analytics and sophisticated fraud detection tools to identify irregularities in claims data. Real-time monitoring of claims enables early identification of suspicious patterns, ensuring that only legitimate claims are processed. This proactive approach to fraud prevention mitigates financial losses for insurers and upholds the integrity of the claims process.

Data Analytics and Insights The extensive volume of claims and healthcare data managed by TPAs provides insurers with valuable insights. These analytics support insurers in optimising provider networks, refining product pricing, and enhancing risk management. Regular feedback on claim turnaround times and denial reasons further enables insurers to improve operational efficiency.

Benefits for Policyholders

Enhanced Customer Experience TPAs contribute to superior service delivery for policyholders by providing round-the-clock customer support and user-friendly digital platforms for claims submission and tracking. Efficient management of inquiries and grievances ensures timely resolutions and clear guidance for customers. The adoption of digital portals and AI-driven support tools further accelerates claim intimation and status updates, leading to higher satisfaction among policyholders.

Access to Quality Care through Cashless Networks TPAs maintain extensive networks of accredited hospitals and healthcare providers, negotiated under preferred tariffs. Policyholders benefit from access to quality care at pre-agreed rates and can avail themselves of cashless hospitalisation at network facilities. TPAs facilitate the identification of appropriate hospitals and coordinate direct settlement of bills, eliminating the need for upfront payments by policyholders.

Transparency in Claims Processing

TPAs promote transparency by offering real-time updates on claim status through digital portals and mobile applications. Policyholders can monitor each stage of the claims process, from initiation to settlement, fostering trust and confidence. Open visibility ensures that customers remain informed and expectations are managed effectively throughout the claims journey.

Cybersecurity and Data Privacy Given the sensitive nature of personal and medical information handled, TPAs prioritise robust cybersecurity measures. Investments in secure data storage, encryption, and stringent access controls protect policyholder data from breaches.

Value-Added Services

Beyond claims administration, TPAs offer a range of value-added services such as wellness programmes, telemedicine support, ambulance assistance, and health helplines. These additional offerings support preventive care and emergency response, contributing to a holistic healthcare experience for policyholders thereby promoting improved health outcomes.

Benefits for Healthcare Providers

Streamlined Billing and Administration TPAs simplify the insurance billing and claims submission process for healthcare providers by serving as a single point of contact. This approach reduces administrative burdens, minimises errors, and ensures claims are processed accurately and efficiently. Providers benefit from the TPAs expertise in adjudication, resulting in fewer claim rejections and greater operational focus on patient care.

Increased Patient Volume Hospitals and clinics within a TPAs preferred network experience higher patient inflows, as insured individuals are directed towards these facilities for cashless treatment. This arrangement drives additional revenue for healthcare providers and ensures a steady stream of insured patients whose bills are settled directly by the insurer.

Efficient and Timely Reimbursement

TPAs facilitate prompt payment to hospitals following claim approval, improving cash flow and financial stability for healthcare providers. The use of technology, such as online claim portals and automated adjudication, expedites the reimbursement process and reduces revenue cycle uncertainty.

Management of Policy Complexity

As insurance products become more sophisticated, TPAs manage the complexities associated with diverse policy features, including outpatient cover, day-care treatments, and wellness benefits. Digital tools provided by TPAs enable real-time tracking of benefits, coverage limits, and authorisation requirements, allowing providers to deliver care without being encumbered by varying insurance terms. This results in smoother coordination between hospitals and insurers, even for complex claims involving multiple treatments or innovative policy coverages.

Importance of TPAs in the Insurance Ecosystem

The increasing volume of claims and the growing complexity of health insurance products have reinforced the indispensable role of Third-Party Administrators (TPAs) within the insurance ecosystem. Over the period FY18–22, the proportion of TPA-serviced premium to total industry premium remained stable at 54.6%. Industry projections by Frost & Sullivan indicate this share is expected to rise to 61.2% by FY2028, reflecting the sectors growing reliance on TPAs for premium administration.

TPA-serviced premium as a % of overall industry premium likely to increase to 61.2%

As the industry progresses towards broader insurance coverage and increasingly tailored benefits, TPAs are well positioned to facilitate this evolution. Their independent role and cost-efficient operating framework render them integral to the ongoing advancement of health benefits delivery in India.

The scale of TPAs partnerships with hospitals, supported by negotiated tariffs, equips insurers to contain ACS growth, lower loss ratios, and improve profitability, while playing a vital role in curbing medical inflation across the health insurance sector

Claims Paid Under Health Insurance Business FY24

Mode of Settlement	TPA No. (lakhs)	TPA Amount ( crore)	In-House No. (lakhs)	In-House Amount ( crore)	Total No. (lakhs)	Total Amount ( crore)
Only Cashless	114.84	34,710.02	42.00	20,525.07	156.84	55,235.09
	(59.69)	(66.94)	(55.12)	(64.87)	(58.39)	(66.16)
Only Reimbursement	73.58	16,302.99	31.07	9,873.56	104.65	26,176.56
	(38.25)	(31.44)	(40.77)	(31.20)	(38.96)	(31.35)
Both Cashless and Reimbursement	1.64	710.98	1.05	763.02	2.69	1,474.00
	(0.85)	(1.37)	(1.38)	(2.41)	(1.00)	(1.77)
Benefit Based	2.33	128.12	2.08	479.40	4.41	607.52
	(1.21)	(0.25)	(2.73)	(1.52)	(1.64)	(0.73)
Total	192.39	51,852.11	76.20	31,625.14	268.59	83,493.17
	(100)	(100)	(100)	(100)	(100)	(100)

Note: Figures in bracket are percent to total. The data is exclusive of PA and Travel.

Share of TPA in Total Number of Claims Serviced

Particulars	FY20	FY21	FY22	FY23	FY24
In terms of count of claims
TPA market share in number of industry claims (%)	69.6	73.4	76.2	74.6	71.6
TPA market share in industry cashless claims (%)	64.7	75.4	81.8	78.7	73.2
Medi Assistss market share in number of industry claims (%)	NA	19.0	21.5	22.4	27.8
In terms of value of claims
TPA market share in amount of industry claims (%)	66.8	63.0	61.7	63.4	62.1
TPA market share in amount of cashless claims (%)	63.8	61.9	63.2	64.7	62.8
Medi Assistss market share in amount of industry claims (%)	NA	17.5	18.6	19.2	23.2
Source: IRDAI, Elara Securities Research	Source: GIC

During FY24, general and health insurers collectively settled approximately 2.69 crore health insurance claims, resulting in a total disbursement of 83,493 crore. The average payout per claim amounted to 31,086. Of the total claims processed, 72% were managed through Third-Party Administrators (TPAs), while the remaining 28% were addressed via in-house settlement mechanisms.

Settlement Channels

• 58.39% of claims by volume were settled through the cashless channel

• Reimbursement-based settlements constituted 38.96% of claims

• An additional 1% of claims were processed using a combination of cashless and reimbursement methods

• From a value perspective, 66.16% of the total disbursed amount was channelled through cashless transactions

This pattern highlights the increasing reliance on TPAs and the progressive enhancement of digital claims infrastructure, both of which are instrumental in achieving faster turnaround times and elevating service standards across the industry.

Evolution Towards Health

Benefits Administration and Enhanced Service

With ongoing changes in the healthcare landscape, many leading TPAs are gradually evolving into Health Benefits Administrators (HBAs). An HBA builds on the core business model of a TPA while providing a broader and more integrated range of health benefit management services for insurers, employers, and members. The Health Benefits Administrator (HBA) model represents a progressive approach to health insurance administration, marked by the integration of advanced technology, strategic partnerships, and a focus on holistic health management.

The following features distinguish the HBA model

• Integrated Technology and Data-Driven Services

HBAs combine real-time analytics with advanced digital platforms to automate claims, strengthen fraud detection, and provide actionable insights and tailored service offerings

• Proactive Stakeholder Engagement

By collaborating closely with insurers, providers, employers, and members, HBAs enable value-based care models, focusing on outcomes, cost containment, and improved health results

• Continuous Innovation

The shift towards HBAs reflects a commitment to ongoing digital innovation, enabling the delivery of efficient, transparent, and future-ready healthcare solutions for all stakeholders TPAs have become indispensable partners in the health insurance value chain, driving operational excellence, stakeholder support, and strategic innovation through their expanded role as Health Benefits Administrators.

Company Overview

Medi Assist Healthcare Services Limited operates as a premier health benefits administrator, providing essential connectivity between insurers, healthcare providers, and members across international markets. The Company delivers a comprehensive portfolio of services, including claims management, fraud prevention, and provider network administration. These offerings are designed to ensure efficient, transparent, and compliant access to health benefits in more than 185 countries.

The Companys operations have transitioned from a traditional third-party administration to encompass full-spectrum health benefits management. Advanced technology and analytics are integrated throughout all processes, supporting insurers in medical cost containment and managing loss ratios. Proprietary digital platforms streamline claims processing for members and facilitate timely settlements for healthcare providers. The Company also manages extensive government health schemes and international private medical insurance, leveraging a global network exceeding 500,000 healthcare providers.

A commitment to digital innovation and industry expertise enables Medi Assist to address the evolving requirements of the health insurance sector. Automated workflows, robust data security, and real-time operational support underpin the Companys reputation for efficiency, transparency, and high service standards. Medi Assist remains a trusted partner for stakeholders seeking reliable and progressive healthcare administration solutions worldwide.

Performance Review and Outlook Medi Assist delivered robust FY25 performance with operating revenue of 7,233.2 million (14.0% growth), EBITDA of 1,541.1 million

(21.3% margin), and profit after tax of 916.0 million, despite sector headwinds including subdued corporate hiring and premium inflation.

In FY25, growth was powered new business acquisition and ~95% client retention driven by superior value delivery to insurers and policyholders through value-added services including FWA detection, cashless services, and instant discharges. Market share expanded to 30.3% in group business and 5.7% in retail which will further be strengthened post consolidation of Paramount TPA.

Margins benefited from operational -based model with no underwriting risk. Technology investments in claims automation, process consolidation, and high operating leverage (with employee costs as the largest expense) drove improvements in margin profile.

Strong cash position of 3,122.4 million and operating cashflow of 1,380.9 million reflects advance payments from insurers for claims processing, enabling negative working capital and minimal reinvestment requirements. This asset-light, low capital intensity model generates strong cash flow and high returns on invested capital, making TPAs indispensable to insurers through operational efficiency and cost control.

Total Income

Our total income increased by 14.4% to 7,470.8 million for the Financial Year 2025 from 6,530.5 million for the Financial Year 2024, primarily due to increase in revenue from contracts with customers.

Revenue from Contracts Our revenue from contracts with customers increased by 14.0% to 7,233.2 million for the Financial Year 2025 as compared to 6,347.3 million for the Financial Year 2024. This was primarily on account of increase in our income from TPA services to 6,678.9 million for the Financial Year 2025 from 5,909.9 million for the Financial Year 2024. The increase in our income from TPA services was driven by an increase in our total premium under management (excluding Government sponsored schemes) to 211.1 billion for the Financial Year 2025 from 190.5 billion for the Financial Year 2024. This increase was largely attributable to the growth of our group accounts portfolio as a result of an increase in business from existing accounts and securing new group accounts and also on account of our retention of ~95% of all our group premiums serviced during the Financial Year 2025. Further, our revenue from operations attributable to servicing Government sponsored schemes increased to 796.6 million during the Financial Year 2025 from 640.4 million during the Financial Year 2024, due to our continuing involvement in major Government sponsored projects covering over

290 million+ beneficiaries.

The increase in revenue from contracts with customers also includes income from health management services to the tune of 455.1 million for the Financial Year 2025 from 396.5 million for the Financial Year 2024. Health management services includes revenue driven by our subsidiary Mayfair UK, our International

Benefits Administrator, that amounted to of 368.4 million during Financial Year 2025, registering a modest growth from 367.7 million Financial Year 2024. Our Technology Services vertical generated license revenue of 99.2 million for the Financial Year 2025, representing a sharp uptick from 26.5 million for the Financial Year 2024.

Other Income

Our other income increased by 29.7% to 237.6 million in Financial Year 2025 from 183.2 million in Financial Year 2024, driven primarily from fair value gains on investments

Expenses

Employee Benefits expenses

Employee benefits expenses increased by 20.2% to 3,058.6 million for the Financial Year 2025 from 2,545.3 million for the Financial Year 2024, primarily due to an increase in salaries, bonus and allowances to 2,804.0 million for the Financial Year 2025 from 2,284.6 million for the Financial Year 2024. The increase in salaries, bonus and allowances was mainly on account of an increase in number of members of our leadership team and our work force (primarily in the claims management, operations, provider partnership teams and Mayfair) during the year to support the growth in our business. Our headcount increased to 6,398 as of March 31, 2025 from 6,140 as of March 31, 2024.

Finance Costs

Our finance costs increased by

225.3% to 103.0 million for the Financial Year 2025 from 31.7 million for the Financial Year 2025, primarily due to interest on working capital loans

Depreciation and amortization expense

Our depreciation and amortization expense increased by 29.5% to 557.8 million for Financial Year 2025 from 430.8 million for Financial Year 2024, primarily on account of an increase in amortization of intangible assets from 185.6 million for Financial Year 2024 to 294.9 million for Financial Year 2025 on account of acquired assets and intellectual property.

Other Expenses

Our other expenses increased by 6.7% to 2,633.5 million for Financial Year 2025 from 2,468.9 million for Financial Year 2024, primarily due to an increase in legal and professional expenses to 510.7 million for Financial Year 2025 from 332.2 million for Financial Year 2024, an increase in advertisement and business promotion expenses to 312.0 million for Financial Year 2025 from 238.4 million for Financial Year 2024.

These increases were partially offset by a decrease in subcontracting expenses to 651.0 million for Financial Year 2025 from 700.0 million for Financial Year 2024, and a decrease in postage and communication expenses to 84.1 million for Financial Year 2025 from 125.8 million for Financial Year 2024.

The increase in legal and professional expenses was mainly on account of higher investigation fees required by customers and transaction expenses arising from business expansion activities. The increase in advertisement and business promotion expenses reflects additional business development activities to support revenue growth. The decrease in sub-contracting expenses reflects efficiency and improvedoperational in-house capability development

Income Tax Expense

Our total income tax expense increased by 54.2% to 201.9 million for Financial Year 2025 from 130.9 million for Financial Year 2024, primarily on account of higher current tax liability due to improved profitability, only partially offset by an adjustment for current tax relating to earlier years amounting to a credit of 5.7 million for Financial Year 2025, significantly lower compared to a credit of 48.8 million for Financial Year 2024, and a decrease in deferred tax credit to 65.1 million for Financial Year 2025 from 74.0 million for Financial Year 2024.

Other Operational Milestones

Operational milestones during the year included the expansion of the provider network to 20,204 (includes network proprietary to Medi Assist + GIPSA hospitals) active partners, with over 10,000 new hospitals added. This expansion has increased the companys ability to negotiate tariffs and maintain service quality across diverse geographies. The introduction of hospital desks in key cities has provided in-person support, improving the experience for both insurers and policyholders. Product innovation remained a priority, with the launch of Raksha

Prime, a differentiated cashless product designed to improve discharge efficiency and real-time out-of-pocket estimation. Investments in proprietary technology platforms, including the continued development of the MAtrix system, have strengthened claims management, fraud detection, and analytics capabilities. These enhancements support the companys transition towards a technology-led, future-ready operating model.

Looking ahead, Medi Assist will continue to focus on disciplined execution and technology-driven operations. The companys strategic priorities include expanding provider relationships, leveraging data-driven insights to optimize operational performance, and advancing the Health Benefits

Administrator model. Medi Assist remains committed to strengthening its efforts towards the prevention and detection of Fraud, Waste, and Abuse (FWA) in claims processing, ensuring greater transparency and trust across stakeholders. The company is well-positioned to address sectoral challenges such as medical inflation, regulatory transformation, and the increasing complexity in claims processing.

Internal Control Adequacy

The Company has established a comprehensive internal control framework designed to safeguard its assets from unauthorised use or disposal. This system ensures that all transactions receive proper authorisation, are accurately recorded, and are appropriately reported. The internal control structure also facilitates optimal resource utilisation and enhances operational efficiency. Regular monitoring of operations is conducted to ensure compliance with applicable laws and regulations. Independent auditors have confirmed the adequacy and effectiveness of these internal control measures.

Human Resource Development and Industrial Relations

The Company recognises its workforce as a critical asset fundamental to its continued growth. A strong emphasis is placed on employee engagement and professional development, with initiatives aimed at enhancing skills and knowledge across all levels. The Company remains dedicated to strengthening its employer brand to attract and retain leading talent within the industry. During the reporting period, employee relations remained harmonious and constructive throughout the organisation. As at March 31, 2025, the Company headcount stood at 6,398 across its group entities.

Cautionary Statement

This Management Discussion and Analysis may contain statements relating to the objectives, projections, estimates, and expectations of the Company, its subsidiaries, and associates. Such statements are considered ‘forward-looking in accordance with relevant laws and regulations. Actual outcomes may differ significantly from those anticipated. Key factors that may affect the Companys operations include economic conditions influencing demand and supply, prevailing price levels in domestic and international markets, changes in government regulations, tax legislation, and other statutory requirements, as well as other incidental factors.

Key Financial Ratios

Particulars	FY24	FY25	Change	Remarks
Current Ratio	1.50	1.49	-0.67%
Debt Equity Ratio	0.05	0.37	+640%	Due to working capital borrowing during the CY
Return on Equity	19.2%	16.6%	-2.6%	Dilution driven by higher depreciation and amortisation cost on account of acquisitions
Debtor Turnover Ratio	4.15	3.62	-12.8%	Majorly on account of increase in Trade receivable
Interest Coverage Ratio	34.3	11.85	-65.5%	Due to working capital borrowing during the CY
Operating Profit Margin	21.0%	21.3%	+0.3%	Improvement driven by successful integration of Raksha acquisition and other efficiencies
Net Profit Margin	14.1%	12.3%	-1.8%	Dilution driven by higher depreciation and amortisation cost on account of acquisitions