The Hindu Business Line : HDFC Standard Life looks for break-even by mid-2007

CORPORATE AGENCY PACT: Mr Deepak Parekh (left), Chairman, HDFC Standard Life Insurance, and Mr Anil K. Khandelwal, CMD, Bank of Baroda, at a press conference in Mumbai on Thursday. - Paul Noronha

Mumbai , June 15

HDFC Standard Life Insurance (HDFC SL) hopes to break even by the middle of 2007, said Mr Deepak Satwalekar, MD and CEO.

The company plans to increase the contribution of bancassurance to 50 per cent this fiscal from 43 per cent last year, he said.

HDFC SL on Thursday entered a bancassurance tie-up with Bank of Baroda. Under this corporate agency agreement, Bank of Baroda (BoB) will market the entire range of life insurance products offered by HDFC SL.

Mr Satwalekar said the company planned to distribute pure protection policies such as insurance products for home and education loans as well ULIPs through this tie-up.

He said that despite the fall in the stock markets, 70 per cent of the `switch' option in ULIPs was in favour of equity. "The largest transfers are towards equity-oriented funds and the concern about ULIPs in a downturn market has not been realised," said Mr Satwalekar.

In the recently concluded financial year, the company registered new business premium of Rs 1,028 crore, a growth of 112 per cent from the previous year.

BoB plans to generate an additional revenue stream through the bancassurance tie-up and tap its current customer base.

On the question of the proposed foray into life insurance, Mr A.K. Khandelwal, Chairman and MD, BoB, said the process of setting up a joint venture was extremely time-consuming. "Our long-term plan is to set up a joint venture in the next two years. But one has to receive the regulatory approvals and fix on a business model before the joint venture is finalised," he said. By year-end, BoB should be treated as a one-stop shop, which offers a range of services and products, said Dr Khandelwal at a press conference.

On the issue of interest rates, Mr Khandelwal said that if the cost of funds increases, then interest rate would rise. "We are not rushing to increase our rates," he added.