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Wednesday, Jan 08, 2003

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HDFC Standard tapping corporate agency route

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KOCHI, Jan. 7

HDFC Standard Life Insurance is aggressively tapping the corporate agency route in a bid to broadbase its distribution network and shore up its customer base.

The insurer today announced its tie-up with the Kochi based JRG Financial Services Pvt Ltd as its new corporate agency channel, after Indian Bank and Union Bank.

Speaking on the occasion of the launch, Mr Paresh Parasnis, General Manager, Distribution, said, "With the change in regulations for corporate agency, we are now focussing on activating our relationships with distribution houses and commercial banks. This tie-up will enable us to reach out to a large number of customers in Kerala."

According to Mr Parasnis, the company proposes to broadbase its distribution network through this route rather than opening up of branches across the country. "We already have around 34 branches across the country but our growth route will be via the corporate agency route. A lot of business is coming up from say, B and C category towns and it is not feasible to open offices in every such location," he said.

Mr Parasnis said that the company was not looking for agents, but was attempting to tap an already existing base of customers.

A fully-owned subsidiary of JRG Associates Pvt Ltd, JRG Financial an active member of NSE and NSDL, will now be marketing the life insurance and pension products of HDFC Standard Life.

Commenting on the size of the market, Mr Parasnis said that in terms of new business private players have around 9 per cent of the total market share in comparison to life Insurance Corporation of India (LIC) which holds around 91 per cent of the market share. In terms of whole business, he said a fair size of the market would be held by LIC alone.

According to the company, Life Insurance premium as a percentage of gross domestic savings is expected to increase from 6-18 per cent over a 10-year period.

Life insurance premium is expected to grow by about 18-20 per cent every year with pension premium going up by about 20-30 per cent. With these projected numbers, the number of policies in force will increase from about 10 crore to about 18 crore.

HDFC Standard Life is also talking to potential institutional partners in a bid to strengthen its presence in rural and semi-urban areas.

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