Financial Daily from THE HINDU group of publications
Saturday, Apr 30, 2005
Financial Daily from THE HINDU group of publications Saturday, Apr 30, 2005 |
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Money & Banking
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Life Insurance LIC in bancassurance pact with Dena Bank Our Bureau
Mumbai , April 29 LIFE Insurance Corporation of India has signed its 32nd bancassurance agreement with Dena bank. Under the current understanding, Dena Bank will serve as a corporate agent and offer products of LIC through its branch network. Of the Rs 200 crore in premium that comes from alternative channels, 70 per cent comes from bancassurance. At present 2 per cent of LIC's business comes from bancassurance. They plan to increase this to 5 per cent. Mr R.N. Bharadwaj, Chairman of LIC, said the average sum assured from bancassurance was Rs 1,80,000 as compared to Rs 75,000 from other channels. Similarly, the average premium per policy from bancassurance was Rs 3,100 as compared to Rs 13,469 from other channels. In February 2003, Dena Bank had signed a Memorandum of Understanding (MoU) with Kotak Mahindra Old Mutual Life Insurance, which was a `referral arrangement'. This meant that the bank would earn a referral fee on referring its customers to the life insurance product. Dena Bank has more than 11,00 branches and about 7.5 million customers. Mr M.V. Nair, Chairman and Managing Director, Dena Bank, said that employees don't sell under a referral arrangement and that the selling of insurance had to be internalised. He said the insurance company expects to sell its structured policies in metros to high net worth individuals. LIC will also use bancassurance in the rural areas and work with women in self-help groups. Among the banks with which LIC already has tie-ups are Corporation Bank, Indian Overseas Bank, Central Bank, Oriental Bank of Commerce, UCO Bank, Bank of Punjab, Indus Ind Bank and Centurion Bank.
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