New Delhi: Insurance company ING Vysya Life Insurance Co. Ltd has prepared a three-year plan to make acquisitions and improve its distribution business, attempting to boost its presence and tackle increasing competition.
“We want to keep investing in India and we look forward to more investments,” said Rene van der Poel, director of alternative channels at ING Vysya Life.
In July, the company, a joint venture of Amsterdam, Netherlands-based ING Insurance International BV, Exide Industries Ltd, Ambuja Cement Ltd and Enam group, invested Rs62.5 crore in its life insurance business.
ING Vysya Life collected Rs704 crore of premiums in 2007-08.
“Apart from (picking up) equity stake, acquisitions can be made to improve distribution business or client advisory services of the company,” said van der Poel.
The company also plans to enhance tie-ups with cooperative banks to reach out to more people. It has tie-ups with 159 cooperative banks across the country.
“We will tie up with around 18-20 cooperative banks in the next two months. The intensive network of cooperative banks and their large customer base are a good opportunity for life insurance companies,” said van der Poel.
Competition is increasing in the life insurance market, which was opened up to the private sector in 2000 after the government dismantled the monopoly of state-owned Life Insurance Corp. of India, or LIC, and allowed joint ventures between local companies and foreign insurers.
The market still remains under-penetrated. The size of the Indian insurance market is about 4.1% of gross domestic product, well below the global average of 6-9%, according to a recent report by consultant McKinsey and Co., which said the potential is immense.
The $40 billion (Rs1.83 trillion) Indian market is expected to grow to $100 billion, the report said.
ING Vysya Life has also aligned with retail stores to generate leads to customers for its policies.
“Retail outlets give you a wider reach,” said van der Poel, adding that ING Vysya Life offers about 5.5% in commissions to these agents, in line with the guidelines of the Insurance Regulatory and Development Authority.
Foreign insurers are limited to a 26% stake in Indian ventures, but a bill pending in Parliament envisages increasing the cap to 49% and removing a rule that requires Indian partners to sell part of their holding either through a public issue or other means to broadbase the ownership of such firms.
“Once the Bill comes through, we surely want to increase our presence in the Indian market as all our shareholders are ready to bring in more money to the business,” said van der Poel.