‘Our aim is to keep life insurance simple’

Gurgaon-headquartered Canara HSBC Oriental Bank of Commerce Life Insurance Co Ltd – a joint venture between Canara Bank (51 per cent), Oriental Bank of Commerce (23 per cent) and HSBC Insurance (26 per cent) – will continue to focus on the bancassurance model for growth. In an interview with Business Line , Vishakha RM, Director, Sales & Marketing, unfolds a roadmap for future growth. Edited excerpts:

Any plan for capital infusion?

Because of the efficient bancassurance model, we have very low costs and high productivity. So even at the expected rate of growth, we do not see any immediate need.

There were some reports of HSBC divesting stake for a new partner. With the government raising the FDI limit, will it benefit the company in any manner?

Firstly, the divestment news is wrong and was fuelled by market speculation. Secondly, this is a shareholder matter. Also, raising the FDI cap in the insurance sector has been announced in the Budget. It is yet to become a regulation.

At present, you are purely into bancassurace (selling insurance products through banks). Would you like to adopt the agency model?

The agent network model has so far not been the most profitable. Why should I let go of a model that is giving me profits?

We have been earning profits for the last two years in a row by tapping less than one per cent of the customer base of the three parent banks. There are close to 7,010 branches between Canara Bank, OBC and HSBC. If we can tap these touch points, I have all the distribution that I need. The potential is tremendous. People need additional models only when they do not have a customer base. But in our case, we have a huge database of our own.

Any plans to introduce new products?

Frankly, life insurance should be more simplified than using a (smart) phone. Our aim is to keep it simple. We don’t want to create a product just for the sake of creating one. It increases the cost.

We keep exploring if there is any requirement for a new product. At present, there is none. We have nine individual and five group insurance products. There are five ULIPs and four traditional products.

What are your growth plans?

We are looking at an annual growth of 40 per cent in new premium collections. In the first quarter, collections stood at approximately ₹104 crore, a y-o-y growth of 33 per cent.

How important is the contribution of group insurance to your turnover?

We try to keep group insurance offerings at 20 per cent of our total business. This gives us the perfect product mix. Considering the capital requirements, this is the ideal mix that will benefit customers and shareholders.

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