ING Vysya Life Insurance Company Ltd, a private life insurer with a market share of just over 1% of new life insurance policies sold in India, aims to nearly double its share to over 2% by the end of the current fiscal year, the Bangalore-based?insurance?firm’s top executives said on Wednesday.
Over three-fifths of life insurance premia in India come from new policies. Towards this end, the insurance firm has chalked out, and implemented, aggressive growth plans that include substantially expanding its presence to 175 cities, up from around 100 cities last year, and strengthening its distribution network.
The industry sold policies with premia worth Rs39,000 crore in the January-June months, of which Rs24,000 crore were fresh policies.
The business is dominated by the public sector major Life Insurance Corporation Ltd, that had a 75% market share as at the end of June. Private insurers (led by ICICI Prudential Life Insurance Co. Ltd and Allianz Bajaj Life Insurance Co. Ltd), who had a market share of 15% in fiscal 2004, have since raised their marketshare to 25%.
“We have signed up alliances with over 100 cooperative banks across the country in the last year or so for distributing our products, and we expect the benefits to accrue from this year onwards,” ING Vysya Life managing director and chief executive Kshitij Jain said.
The immediate target segment of the insurance company is ING Vysya Bank customers. A new life insurance product branded, Positive Life, would be marketed and prospectively cross-sold to a 1.5- million customer base of the affiliate bank. At present, ING Vysya Life has around 400,000 customers.
Stating that close to 10% of its business originates from ING Vysya Bank branches, 80% from direct distribution network, and around 10% from other channels, Jain said the business from ING Vysya Bank is set to grow substantially.
“Following the steps that we implemented in the last year or so, we expect to outgrow the industry, which is reporting a growth of around 30%,” Jain said. “We expect to grow at over 60% a year in the next three to four years.”
While there are immense growth opportunities before private sector players in the insurance market, analysts predict huge challenges. “It is essential for businesses to be focused on chosen segments and be efficient because along with increasing competition, the capital requirements and investments are expected to be significantly large and they have longer gestation periods,” said Sanjay Aggarwal, national industry director, financial services with consultancy firm KPMG International.
ING Vysya Life hopes to net revenues of around Rs1,400 crore in premia this year and has “set a target of reaching Rs5,000 crore by 2009-10,” Jain added.
The insurance firm currently has a 20-product-strong portfolio with 13 insurance products and seven products linked to investment units.