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Mr Shailendra Bhandari (left), Managing Director, Centurion Bank, with Mr Sandeep Bakhshi, Managing Director & CEO, ICICI Lombard General Insurance, at a press conference in Mumbai on Thursday. - Shashi Ashiwal

Mumbai , June 6

CENTURION Bank and ICICI Lombard have signed a bancassurance agreement for the distribution of general insurance.

As per this referral arrangement, Centurion Bank will distribute personal and business covers through its branches, direct sales teams and marketing offices across India.

Centurion Bank, which begins distribution on July 1, will also offer customised general insurance solutions to its corporate banking customers. Mr Shailendra Bhandari, Managing Director, Centurion Bank, said, "We believe that the `mass affluent segment' or the middle-class which has a total wealth of Rs 8-15 lakh is largely under-serviced. As a part of wealth management product offering, we are looking at making available a gamut of general insurance products offered by ICICI Lombard."

Centurion Bank already has a tie-up with Bajaj Allianz for the distribution of life insurance products. The bank plans to double the number of branches from the current 99 and extend its geographical penetration from 58 to 75 locations. For the rural areas, the bank plans to use the `hub and spoke' model and will set up around 1,500 dealer showrooms.

The bank will look for inorganic growth, only if it adds to shareholder value, Mr Bhandari said. We will look for growth, product and business synergies, he added. The bank will use 50 per cent of the over Rs 300 crore raised through GDRs, for organic growth, he said.

The bank also aims to expand its retail business by 65 per cent by focusing on retail, small and medium-term enterprises.

For ICICI Lombard, this will be the third bancassurance tie-up after ICICI Bank and ABN Amro. Bancassurance accounts for 25 per cent of the company's premium income. Mr Sandeep Bakhshi, Managing Director and CEO, ICICI Lombard, said that bancassurance is an opportunity as both the customers and the channel belong to the bank.

In a de-tariffed environment and the eventuality of a fall in premium, Mr Bakhshi said that the company wants to de-risk its fire and corporate insurance portfolio by increasing the retail business from the current 30 per cent to 65-70 per cent by 2007.

ICICI Lombard also plans to introduce a health insurance product that covers pre-existing diseases with defined sub-limits. Health insurance is a growing line of business, he said.

On the de-tariffing of hull insurance, Mr Bakhshi said that premiums have fallen in the range of 25-30 per cent.

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