Aviva Life plans tie-up with co-op banks

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Aviva Life Insurance is planning to join hands with the cooperative banks in India to expand its reach besides augmenting its direct sales force significantly.

“Bankassurance has been one of our strongholds in India and we prefer to make cooperative banks a channel to reach the countryside in India,” Mr Bert Paterson, Managing Director, Aviva Life Insurance India, told Business Line during the International Insurance Summit held recently in Prague.

Fool-proof-strategy

The company has done lot of homework and a “fool-proof strategy” is already in place for partnering with the rural banks, he added.

The UK-headquarted company has already tied up with the Basix Group for its micro insurance product.

“In addition, banks would be a prime channel for us and the details about the partnerships would be made public soon,” Mr Paterson said.

Currently, Aviva (which holds 26 per cent stake in the joint venture company with Dabur) has tie-ups with Centurion Bank of Punjab, ABN Amro, American Express Bank, Lakshmi Vilas Bank and IndusInd Bank, among others.

Bankassurance

Bankassurance in India is becoming competitive with leading private banks and some public sector banks going on their own to tap the insurance potential.

“Aviva had pioneered the concept of bankassurance in India and we would strive to be in the lead.

“We are devising a totally different strategy in this regard,” he said.

The company will also strengthen its distribution channel.

“Currently, bankassurance accounts for 60 per cent of our distribution while remaining 40 per cent done by our direct sales force.

“We want to recruit over 3,000 personnel to strengthen our direct sales force,” Mr Paterson said.

More products

On the product front, the company, which recently launched ‘Grameen Suraksha’ a micro insurance product for BASIX customers, would add more products to suit rural customers soon.

“We will be launching more products in this segment,” he added.

The company is also willing to infuse more capital into its Indian operations.

“We had invested Rs 199 crore in January 2007 and plan to infuse more capital over the next two years,” he said while declining to disclose approximate figures.

On the relationship with Dabur Group in India, Mr Paterson said they shared “excellent” understanding.

“We have also worked out the modalities of relationship between the two companies in the likely 100 per cent FDI regime in the future,” he added.


Source: The Hindu Business Line

Bank of Baroda plans life insurance foray

As part of its wealth management initiative, Bank of Baroda (BoB) will venture into mutual fund business very soon. Bank of Baroda Asset Management Company, a subsidiary of the BoB in collaoration with the Italian company 'Pioneer' will form a joint venture for mutual fund business.

"The memorandum of understanding (MOU) has been signed and the details are being worked out", V Santhanaraman the Executive Director of the bank told Business Standard.

Of late mutual funds have become a major destination for investment. Sensing this, the bank has decided to make a foray into the business. As this required specialized expertise, the bank has gone for foreign tie up, he added.

"With the disposable income rising , the high salaried and professionals are evincing interest to invest in mutual funds", he said, adding that apart from easy liquidity, the MF instruments offer tax incentives which has become another cause of attraction.

According to him , various mutual fund products catering to different segments of people will be developed by Pioneer and the marketing of the products will be made by Bank of Baroda Asset Management Company.

The bank is betting big on this venture and expects to be among the top five within next five years. Besides, as part of diversification plan the bank will venture into the life insurance business very soon.

For this, it tying up with London based Legal and General. "A joint company will be formed with 26 percent equity participation by Legal and General", he said.

The remaining equity will be held by the Bank of Boroda, Andhra Bank and some other institutions which are to be finalized yet, Santhanaraman added.

The bank at present has 2732 branches across the country and plans to add 150 more branches and 120 offsite ATMs soon. About 31 branches are to be opened by end of July.

In Orissa the bank will open 7 more branches during the current fiscal to take the total to 49 from 42 at present. While two more branches will be opened very shortly, the bank has applied for license for the remaining 5 branches. Importantly, 25 of the bank's 42 branches in the state will be under the Core Banking Solution (CBS).

At the national level, while 80 percent of the current business is covered through CBS branches, it is likely to go up to 90 percent by March 2008.

Further, to meet the rising credit requirements of the Small and Medium Enterprises, the bank has come out with the concept of SME loan factory. The credit requirement beyond Rs.25 lakh will be provided by this outlet.

The bank has 15 such factories in the country and plans to add 16 more during the current fiscal including one in Bhubaneswar.

Bhubanesswar SME factory is likely to come up before December 2007, he announced. Besides, within next 4-5 months Baroda Vikas Sansthan (BVS), the training institute for self employment, will be functional in Orissa.

Currently, the bank is at the fourth position among PSU banks in terms of profit and third largest in terms of business. However, it aims to be number one by 2010-11.It expects the product and processes to drive its growth. However, maximum stress will be given on the customer satisfaction, the executive director said.

It may be noted, the bank achieved a business of Rs 2, 09,000 crore by March 2007 with Orissa business contributing Rs 1413 crore. Orissa has emerged as a major growth centre in the east and the bank is according top most priority to it, he said.

Source: Business Standard