Bajaj Allianz Life Insurance Company (BALIC), a private life insurer, is now doubling down on its bancassurance play that has paid rich dividends over the last five years, propelling the share of its institutional business in its overall revenue mix from about 8 per cent in 2017 to 51 per cent in 2022, a top company official said.

The insurance regulator IRDAI’s recent regulatory move to widen the open architecture for bancassurance — allowing a bank to distribute products of 9 insurers (earlier 3) in each of life, General and health segments — has prompted BALIC to scout for more bank tie-ups and keep the growth momentum growing to scale newer heights, Dheeraj Sehgal, Chief Distribution Officer-IB, told businessline.

“We already have partnerships with 24 banks. But this does not mean we will rest on our laurels. We will continue to be focused on growth, stay very very hungry for partnerships and continue to innovate”, Sehgal said.

“We will continue to scout for more partnerships. What we’re there to showcase to the distribution industry is that, there’s this company which has constantly been keeping customer and the distributor needs as the central point of focus and we have transformed our talent pool, our technology, our processes, innovated our products keeping these two entities at the centre of everything that we’ve done so far and, hence, we call ourselves Bespoke Bank Assurance”.

Sehgal highlighted that BALIC’s institutional business growth have recorded 5 year (FY17 to FY22) compounded annual growth rate (CAGR) of 67 per cent ( on individual rated new business). This life insurer’s institutional business accounts for 51 per cent of overall annual premium revenue. 

“Top five insurance companies today have, for the last five years if we see the averages, are at about 61-63 per cent. So, even if BALIC has to compete on contribution, within that, we’re at 51 per cent. We clearly see the headroom of another 12-13 per cent to just reach at par with them”, he added.

Going forward, BALIC will continue to engage with current partners so as to expand the pie, undertake a more extensive and penetrative work on the side of Data Analytics besides continuing with the journey on tech and process innovation, Sehgal added.

The Insurance Regulatory and Development Authority (IRDAI) had on November 25 as part of series of measures to ensure ‘Insurance for All by 2047’ announced widening of open architecture for bancassurance and said that every bank could enter into tie-ups with maximum of 9 insurers each in life, health and general insurance segment.

Sehgal noted that the latest IRDAI move of widening of open architecture  would be a good ray of hope for the younger, smaller organisations to get access to a meaningful bancassurance distribution. Secondly, banks will be able to offer more choice to their customers, he said. 

“Third thing is, as an industry, it will do a whole lot of good in terms of bringing innovation in product, in technology, in processes, in customer service, everything, because you know that now the customer has so much more choice. Otherwise, if I’m from one of the insurance companies, I know that I have to just benchmark against the two of you who are in the same space. Tomorrow, I know that the possibility is not only two of you, the possibility is six more, I would continue to upgrade myself or atleast make an effort to upgrade myself in product offerings, in service offerings, in technology offerings”, he said.

This reform would now give insurance companies a possibility of access to large bancassurance distribution besides giving a better deal for smaller and younger organisations.

“Because, when it was limited to 3, if you run a bank, you would look at your interests, your priority, and you would only be focused on those companies which can do that. So, the younger organisations, the smaller organisations, organisations who don’t really have bancassurance, they could, by a very natural way of elimination, get eliminated from your preferences”, he said.