Thursday, July 12, 2007

MetLife hiking capital to fund expansion

Company announces bancassurance tie up with Barclays Bank
Mumbai, July 11 MetLife India Insurance Company will hike its capital base by around Rs 200 crore taking it to Rs 731 crore.
Mr Rajesh Relan, Managing Director, MetLife, said the capital would fund the company’s expansion in India.
“Capital efficiency is more important than capital utilisation. Raising capital will be one of the biggest challenges for insurance companies going ahead,” Mr Relan said.
He said that insurance companies were talking to regulators about using hybrid instruments for raising capital. Mr Relan, who took over as Managing Director of MetLife in September 2006, is pushing bancassurance as a distribution channel. He was earlier the head of bancassurance at Aviva Life Insurance.
The company today announced a bancassurance tie up with Barclays Bank. Through this tie-up, the bank hopes to tap high networth individuals. “Around 48 per cent of our business comes from bancassurance, which was at around 35 per cent last year. However, agency will remain the mainstay for the company,” Mr Relan said.
For MetLife, the coveted bancassurance tie up with UTI Bank, which was toughly contested for by other insurance companies, now brings in around 30 per cent of the company’s total business. The company has three other bancassurance tie ups with J&K Bank, Karnataka Bank and Dhanalakshmi Bank.
MetLife insurance is expanding its distribution network. The agency force, which increased from 8,000 to 25,000 in 2006-07, will be expanded to 40,000 this fiscal, Mr Relan said.
MetLife reported new business premium of around Rs 344 crore in 2006-07, against Rs 142.63 crore in the previous fiscal. The company’s market share has increased from 1.3 per cent to 2.5 per cent in the recently concluded fiscal.
On when MetLife would break-even, Mr Relan said that it would depend on when the renewal premium overtakes new business premium.
MetLife’s product portfolio is dominated by Unit Linked Insurance Plans, which contributes 94 per cent of the company’s business.
Mr Relan hopes to end the year with Rs 600-crore of new business premium, which would be a growth of almost 100 per cent.
Source: The Hindu Business Line

No comments: