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The proposed merger of Andhra Bank with Union Bank is unlikely to impact the operations of IndiaFirst Life Insurance Company (IndiaFirst Life) this fiscal, said RM Vishakha, Managing Director and CEO, IndiaFirst Life.
“At the most, it (Andhra Bank merger announcement) is a distraction. For all practical purposes, I will continue to focus on business for the next seven months. There is no change for us in terms of operations. Andhra Bank branches will continue to be available for distribution this fiscal,” Vishakha told BusinessLine .
Andhra Bank has been both a promoter shareholder and a distributor for IndiaFirst Life since its launch in 2010.
Currently, Andhra Bank has 30 per cent stake in IndiaFirst Life, which is a three-way joint venture between Bank of Baroda, Andhra Bank, and Carmel Point Investments India (a Warburg Pincus affiliate). It may be recalled that Andhra Bank had, since December last year, been looking to sell its holding in IndiaFirst Life.
Future uncertain
Now, with Andhra Bank set to be merged with Union Bank as part of the mega bank merger plan unveiled by Finance Minister Nirmala Sitharaman recently, there is some uncertainty over the future of bank-promoted insurance ventures such as IndiaFirst Life.
However, Vishakha felt it would be ‘business as usual’ approach for IndiaFirst Life at least till April 1, 2020, when the proposed merger is expected to come into effect.
For the current fiscal, IndiaFirst Life is eyeing a 30 per cent growth in retail new business premium (NBP). This will be much higher than the 18 per cent growth clocked by this life insurer last fiscal.
“This 30 per cent aspiration is certainly ambitious. It’s not going to be a walk in the park, especially with the uncertainties around Andhra Bank. But last year, we did 18 per cent NBP growth when the industry grew 12 per cent. In the current fiscal, industry is also growing better than last year. We should grow better than industry has always been our ambition,” said Vishakha.
For April to August 2019, IndiaFirst Life recorded retail NBP of ₹240 crore, a 20 per cent year-on-year growth. Vishakha also said that the entire branch network of Dena Bank and Vijaya Bank — now merged with Bank of Baroda — would be activated this year for selling IndiaFirst Life’s products. As many as 4,000 branches of Dena Bank and Vijaya Bank have come under the fold of BoB from April 1 this year post the three-way merger. “There is now good contribution (in NBP) to us from the erstwhile branches of Dena Bank and Vijaya Bank branches,” she said.
Earlier this year, IndiaFirst Life’s Deputy CEO Rushabh Gandhi had said that the life insurer was targeting a retail NBP of ₹1,000 crore this fiscal.
Maiden dividend
Meanwhile, IndiaFirst Life — which will soon turn 10 — has entered the dividend list, declaring a maiden dividend of ₹11 crore for fiscal 2018-19. This is, however, subject to shareholders’ approval, which will be sought at the upcoming annual general meeting.
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