Chief Financial Officer / India
Keep the price and its conditions together
- Gross written premium
- ₹940 crore
- Company FY ending March 2026; not the CFO's budget or accounting revenue
- Finance organisation
- 34 colleagues
- Five heads and ₹5.6 crore FY 2026–27 function expense
- Provider and insurer finance
- 31 years
- July 1995 billing entry; CFO sinceJanuary 2020
Decisions & consequences
01The cheaper policy was partly a different policy mix
Our 2022 service review compared ₹4.2 crore of annual expense with 36,000 policy-years in one period and ₹4.32 crore with 48,000 policy-years in the next. The cost per policy-year fell from approximately ₹1,167 to ₹900. I placed that result in the executive summary as evidence of a substantial efficiency improvement. Operations colleagues challenged the interpretation because the mix had shifted from more family contracts towards more individual contracts. The count of contracts had changed faster than the people receiving cover.
Using the same periods and service-expense scope, covered life-years were 84,000 and 86,000. The corresponding cost was ₹500 and approximately ₹502 per covered life-year. That did not prove the organisation had become less efficient either. Some work follows a contract, some a person and some a specific service event. Harish Velqazi also cautioned against using either administrative ratio as a conclusion about claims risk. We needed a clearer account of the work before deciding whether staffing could be reduced.
I withdrew the broad efficiency claim and supported ₹24 lakh of activity and cost analysis with operations. We kept both views in the management pack, then examined which activities each could explain. A proposed reduction of four service positions was held while that work proceeded. The staffing decision had an opportunity cost because the original budget expected a lower run rate; retaining people was not described as a cash saving. Nor did we claim that every service pressure required more staff.
The resulting account distinguished contract administration from person-related service work and from tasks whose volume depended on events. It did not produce a single perfect denominator. The board received a less dramatic headline and a more useful basis for subsequent capacity decisions. My correction was personal as well as procedural: I had accepted an attractive ratio because its arithmetic was right and its message was welcome. I would now ask an operating colleague to describe what changed in the population before presenting a lower unit cost as evidence that the same work had been performed more efficiently.
A two-per-cent discount required more funding than it returned
A 2023 hospital-network proposal offered a 2% discount on ₹20 crore of eligible annual bills in return for an ₹8 crore advance kept at that level for twelve months. On the stated volume, the discount was ₹40 lakh. The commercial team favoured the arrangement because the price concession was visible and the relationship was important. The opening comparison placed the discount beside ordinary settlement terms without making the cash commitment equally prominent.
I asked finance to show the cost of maintaining the advance. At the planning assumption of 8% a year, ₹8 crore carried ₹64 lakh of funding cost. That exceeded the proposed discount by ₹24 lakh before considering counterparty exposure, contractual protections or additional administration. The funding rate was a comparison assumption, not a claim that we had already borrowed and paid that interest. Legal and provider-management colleagues reviewed the terms, while medical and claims decisions remained outside this commercial calculation.
We spent ₹19 lakh on financial and contractual review and recommended retaining ordinary settlement terms instead of the year-long advance. The CEO accepted the recommendation after considering the provider team's concern about losing a concession. We did not seek to offset the financing disadvantage through changes to policyholder benefits or clinical decisions. The relationship continued under its existing payment arrangement. Rejecting the proposal did not create ₹24 lakh of realised profit, because the advance and associated funding cost had never been incurred.
The outcome was a decision not to enter a particular financing arrangement on the assumptions presented. A different volume, advance balance, duration or funding cost could produce a different conclusion, subject to the other risks and requirements. I wanted that conditional reasoning preserved so the case would not become a rule against all advances. The lesson was to place the timing and amount of cash beside a discount at the beginning of a negotiation. A small percentage can be meaningful, but it cannot describe the whole price when obtaining it requires the company to fund another party's balance for a year.
The approved funding plan had not all reached the company
In 2026 shareholders approved a pro-rata ₹80 crore funding plan, with the existing ownership proportions intended to remain unchanged. By the commercial decision date, ₹32 crore had been received and ₹48 crore remained subject to agreed conditions and completion steps. The expansion proposal nevertheless used ₹80 crore as though it were available funding. It requested ₹36 crore of new-market expense commitments, separately from the resources needed for the existing policy book and ordinary obligations.
Rhea Zelmethi wanted to preserve the opportunity because the owners supported the strategy and the remaining contribution was expected. I accepted that support as relevant, but asked the paper to distinguish approval from receipt and completion. We also retained separate professional review of accounting and regulatory treatment; neither a funding promise nor a bank receipt was presented as a complete determination of eligible capital. The question I had to answer was what commercial commitment the company could responsibly make at that stage.
I recommended ₹14 crore of initial new-market commitments with the remaining ₹22 crore deferred until funding and the other conditions were confirmed. The board accepted the narrower first commitment. Finance and legal review cost ₹31 lakh, reported as an expense of preparing and implementing the decision. The existing claims and servicing plan remained separately funded and was not treated as an optional use competing with the expansion. Commercial colleagues had to sequence work more slowly and accept that some opportunities might be lost.
At this profile's October 2026 review, the stated ₹48 crore balance remained conditional and was not included as received cash. The ₹22 crore deferred commercial amount was not called a saving; it described work the company had not yet committed to undertake. The case does not claim that shareholder support was withdrawn or that expansion would necessarily have failed under a faster plan. It records a decision to align commitment with the funding state actually established. I would make those states visible in the first version of a growth paper so the board can assess the cost of delay without first having to discover that an approved amount is being used as a cash balance.
The unit quote was lower than the contract's minimum bill
A processing-service renewal quoted ₹180 per administrative item with a ₹6 crore annual minimum. The forecast of 300,000 items produced ₹5.4 crore at the quoted unit rate, but the payable minimum remained ₹6 crore. The operating sponsor's first comparison used the unit calculation. I asked the team to reconstruct the actual contractual account and include the work we would continue to perform internally. The provider handled administrative records; coverage and clinical decisions remained with our authorised specialists.
An alternative provider offered a ₹2.4 crore annual base plus ₹90 per item, requiring a three-year base commitment and separate charges for work outside the agreed scope. At the forecast volume, the provider charge would be ₹5.1 crore. The proposal also required ₹72 lakh of transition cost and ₹31 lakh of additional annual internal oversight. The lower ongoing quote therefore came with a longer fixed commitment and a first-year cost that was less attractive than the recurring comparison alone suggested.
Operations assessed the service scope and implementation, and legal colleagues examined the contract. I supported the alternative after those reviews, with the longer commitment stated explicitly in the approval paper. Actual first-year volume was 220,000 items. Provider charges were ₹4.38 crore: ₹2.4 crore base plus ₹1.98 crore variable fees. Adding ₹72 lakh transition and ₹31 lakh oversight gave ₹5.41 crore for the defined first-year account. At that same volume, the previous arrangement's ₹180 unit calculation would have been ₹3.96 crore but its ₹6 crore minimum would still apply.
We reported the ₹59 lakh difference from that contract comparison without presenting it as a complete company-profit movement or proof of improved claims quality. Service performance required its own review, and future volumes, scope changes and the three-year commitment could alter the economics. The decision also left management with more internal supervision than the original unit-price slide showed. I would bring the minimum, duration and retained work into the first supplier comparison next time. A financial recommendation is stronger when colleagues can see the promise the company is making, rather than discover it after accepting a persuasive price per item.