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C. Shivkumar

For retailing insurance products

Bangalore , Jan 4

The ING group has begun discussions with the Department of Posts for retailing life insurance products through the India Post network in the country.

ING sources confirmed that such discussions had been held, though they refused to comment on the status and progress.

The negotiations were conducted directly by ING group executives.

The Amsterdam-headquartered financial powerhouse is seeking to expand its distribution for its domestic joint venture ING Vysya Life Insurance Company Ltd, in which it holds 26 per cent stake.

Exide Industries and Gujarat Ambuja Cement hold 50 per cent and 14.87 per respectively. The Enam Group and Mr Roopchand Bhansali hold another 9.13 per cent.

ING already has a tie-up with Japan Post for distribution of life insurance products for its insurance venture in that country. ING is looking to replicate the corporate agency model with India Post, the sources said.

But they added that the ING Group was not alone in looking for a tie-up with India Post; almost all life insurers are also in the race.

India Post's benefits from such tie-ups would be in the form of additional income and that could turn its revenue deficit into a surplus. The estimated revenue deficit estimated for the current fiscal for is Rs 1,342.19 crore, up from last year's Rs 1,112.70 crore.

Such tie-ups would allow the insurer to penetrate into class II, class III and semi-urban/rural regions of the country.

Currently, the bulk of ING Vysya's sales comes from the tied agency network, including bancassurance arrangements.

Another 10 per cent comes from its untied agency and the remaining through alternative channels of distribution.

It is this alternative channel arrangement that ING wants to upgrade so as to sustain growth.

One such channel is the arrangement with the public sector Chennai Fertilisers Ltd (CFL), which allows the group to sell insurance products to farmers through the fertiliser distribution channel. In addition, ING has forayed into the North-East.

Mr Kshitij Jain, Managing Director and CEO, said: "We have tied up with the Assam District Central Co-operative Bank. In the rural and semi-urban regions the preference is for savings-linked schemes."

For the current calendar year, the Group has targeted premium of Rs 1,400 crore, a growth of over 100 per cent. This includes renewals and new premium accretions.

For sustaining this growth momentum, the group has already pumped in capital of Rs 100 crore, pushing up its paid-up equity to Rs 640 crore.

The parent Group and the current equity partners have indicated that over the next three years, they would contribute to raise the paid-up capital to Rs 1,340 crore.

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