Aegon NV will infuse Rs600 crore in the Indian venture, which is 26% of the total infusion planned over the next few years and is keeping an eye on the foreign direct investment norm for life insurance companies being expanded.
The Dutch company is also testing the waters on the asset management front after the Securities and Exchange Board of India decided to scrap commissions.
“We are seeing how the situation pans out and will then take a decision,” said Alex Wynaendts, chief executive officer of Aegon NV.
“We want to be the most preferred insurer in India by 2015. Our focus is high product quality and reducing expenses,” Wynaendts said.
Asked how would the insurer manage to be most preferred when the regulations have asked for reduction in charges, Wynaendts said “commissions do not determine whether you are preferred or not”.
“In the UK, we realised that the commissions were notoriously high and said we need to change it. Aegon was the first to lower the brokers commission in the UK market. Later the market followed. We have gained market share after we reduced the commissions. It was 6-7% earlier, which went up to 10%. You go through the pain”
The quick turn around time too helps brokers, says Rajiv Jamkhedkar, chief executive officer at Aegon
Religare Life Insurance.
“The sales support and responsiveness helps our partners. We are able to send out policy papers in 5 days, which is best in the industry and the payments are made to partners on the 31st of each month. These are minute but important things.”
This is going to help the insurer sign on a big bank as their bancassurance partner soon, says Jamkhedkar.
Aegon NV that holds a 26% stake in the Indian life insurance venture will however be waiting before launching products based on its core strength of pension plans.
“Based on the current regulations it doesn’t make sense for private players to launch pension products if it is not sustainable. As a result of this guarantee the potential for future upside for the customers is limited,” says Wynaendts.
The writer was in The Hague at the invitation and hospitality of Aegon Religare Life Insurance.
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