The Hindu Business Line : Bajaj Allianz Life to infuse more capital

Bajaj Allianz was preparing to penetrate the rural markets, Mr Gupta said. In these markets, the bias was more in favour of savings linked policies.

Bangalore , Oct. 29

BAJAJ Allianz Life Insurance Company Ltd proposes to bring in more capital to meet its high growth targets for the current year.

Bajaj Allianz's Chief Financial Officer, Mr Mukul Gupta, told Business Line that, "Both the equity partners are ready to bring in more capital to meet the business requirements."

Bajaj Allianz Life Insurance is a joint venture between Allianz AG, one of the world's largest insurance companies, and Bajaj Auto group. It is currently capitalised at Rs 250 crore.

Mr Gupta said that the capital infusion was unlikely to be affected by the hurdles faced for raising the foreign direct investment in the insurance sector to 49 per cent.

According to data released by the Insurance Regulatory and Development Authority, premium collection by Bajaj Allianz was Rs 250 crore for the first six months of the current year, a 325 per cent increase over the corresponding period of the previous year.

For the entire 12-month period of the last financial year, the premium accretions were Rs 229 crore. As a result of this high growth rate, the capital requirements for the company had also substantially increased, he said. At least 60 per cent of the premium generated came out of unit-linked policies. Moreover, Bajaj Allianz was preparing to penetrate the rural markets, Mr Gupta said. In these markets, the bias was more in favour of savings linked policies. "We are in the process of designing policies for the rural markets," he said. The kinds of policies being devised would have premium holidays built to coincide with the cropping seasons, he added.

For delivery of such products, he said, Bajaj Allianz would be using the bancassurance channels. The bancassurance partners he said currently contribute about 35 per cent of the premiums. For the proposed rural insurance product, he said, Bajaj Allianz would depend on these channels. This was especially since Syndicate Bank had an extensive rural network in the country.

The group insurance was targeted to bring in at least 15 per cent of the premiums for the insurer in the coming months, he added.

Mr Gupta said, that the group was awaiting the formation of the Pension Regulator and formulation of guidelines. He said, that the group was prepared set up a separate subsidiary for pension fund management.