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ShareKolkata: Canara HSBC Oriental Bank of Commerce Life Insurance, the three-way life insurance JV between Canara Bank (51%), HSBC (26%) and Oriental Bank of Commerce (23%) is in the process of rolling out a host of group insurance products including group term and group credit loan insurance products in the current fiscal. The company is also weighing entering the health space and launching a capital guaranteed product.
In an interview with DNA Money, Harpal Karlcut, CEO, Canara HSBC OBC Life said, "We earned about Rs 300 crore of premium last fiscal. The aim would be to double this. The company has already done over Rs 500 crore in 14 months since launch, which is one of the fastest in the industry. In September alone, we had an annualised premium of Rs 60 crore."
The life insurer is betting heavily on leveraging the extensive branch network of the three banks.
"At present we operate out of 600 bank branches, out of a total of 4,100. By the close of the fiscal, we would be using 1,200 bank branches."
Talking on new products, he said that the company hopes to roll out group products.
"This is a strong area for banks and we are now in the process of having the training and communications sessions in place. We also intend to look beyond normal group policies and tailor them for commercial customers of the banks," Karlcut said.
Currently, the company has 10 products: 6 unit-linked products and 4 traditional products.
The company also recently introduced immediate payouts on death claims, where the deceased's family would receive the fund value immediately on registration of death claim under unit-linked policies.
Meanwhile, it is in the process of filing its modified unit-linked products with lower fund management charges with the Insurance Regulatory & Development Authority (Irda).
On whether the company intends to explore other distribution formats, Karlcut said that for the present, Canara HSBC Oriental would not push for other distribution channels such as the agency model.
"Our strategy would be to focus on bancassurance. We understand the customers of our shareholders and tailor and position our products in line with their needs. Moreover, bancassurance is a much more efficient and cost-effective model. We already have bank branches and we don't have to duplicate infrastructure. Hence costs are lower," he said.
But isn't it a challenge to have two public and one private sector banks to sell? "The three JV banks together have 48 million customers, which is more than the working population of the UK. Each bank has its own segmentation and profile of customers with OBC having more north Indian customers whose risk attitudes are different from a Canara Bank customer. Both have huge rural networks. HSBC, on the other hand has more affluent and international customers. The challenge is to exploit the entire potential of the three banks," Karlcut said.
The insurance company will infuse Rs 200 crore of additional capital as and when it needs in the current fiscal. It has a current equity capital of Rs 525 crore.
Asked whether the bancassurance model will lead to a larger market share in the coming years, Karlcut said, "At present we are 13th in market share among 21 players. We don't have a target as such but would definitely try to be among the top 10 in market share in a year or so."
