The Hindu Business Line : Aviva may raise capital by Rs 50 cr

Mr Stuart Purdy, CEO, Aviva Life Insurance, with Mr A. Krishnamoorthy, Chairman and CEO, Lakshmi Vilas Bank, during the launch of insurance products through the bank in Chennai on Wednesday.

CHENNAI, Dec. 18

AVIVA Life Insurance Company's capital is likely to be enhanced by Rs 50 crore. The promoters, Aviva plc of the UK and Dabur, will bring in the money next month. This will take the capital base of the company to Rs 160 crore.

Disclosing this to Business Line, the Chief Executive Officer of Aviva Life, Mr Stuart Purdy, said that the additional capital was found necessary because "business has taken off more positively than we had anticipated". In the five months since it started operations, the company sold 7,000 policies, he said.

Business would grow further in the coming months, because the bancassurance model is just taking off now. Aviva Life Insurance has about 600 agents — fewer than most other life insurance companies (and if the IRDA would let Mr Purdy has his way, they would all be the company's employees, rather than agents).

But it has tie-ups with the Lakshmi Vilas Bank, Canara Bank, ABN-Amro Bank and the American Express Bank, for distributing its products.

The first set of policies through the `bank' distribution channel was sold today, through the Lakshmi Vilas Bank, for which Aviva Life organised a `launch function' here.

Answering a question, Mr Purdy said that Aviva Life had budgeted for a Rs 10-crore ad spend in the first full year of operations. He said this was rather conservative, but observed that the company would derive benefits from the ad campaign of its parent company in the UK.

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