Encouraged by its strong financial performance in 2018-19, Canara HSBC Oriental Bank of Commerce Life Insurance Company Ltd (CHOICE) has now set its sights to enter the top-five rankings in the industry league in the next few years, a top official said.

“We are now ranked 10th in most parameters. Our aim is to make it into the top-five, going forward,” said RA Sankara Narayanan, Chairman, CHOICE.

The life insurer, which has now completed 10 years of operations, has completely wiped off its accumulated losses, achieved cumulative break-even, and reported net profit of ₹165 crore in 2018-19, said Anuj Mathur, Managing Director and Chief Executive Officer.

Capital-raising plans

Narayanan also said that the life insurer was not looking to go public anytime soon. It was also not looking to raise capital for the next three years, given that it was comfortably placed on the capital front. The three-way joint venture between Canara Bank (51 per cent), OBC (23 per cent) and HSBC Insurance (Asia Pacific) Holdings Limited (26 per cent) is now capitalised at about ₹950 crore.

Narayanan, who is the Managing Director and CEO of Canara Bank, also made it clear that none of the three shareholders – Canara Bank, HSBC and OBC – were looking to exit the venture or trim their shareholding.

“There is now no immediate requirement for any of the three banks to exit. We have full confidence in the company. Whether it is Canara Bank or HSBC or OBC, the intent is to add value to organisation rather than getting out of it,” he said.

This is in sharp contrast to the position in the year 2013 when HSBC was reportedly looking to exit the venture.

Alistair Chamberlain, Global Head of Product & Actuarial, HSBC Insurance, said that HSBC is very happy to be involved with the joint venture (CHOICE).

“Speaking as a shareholder, this is a company that has grown very quickly and operationally efficient. It is profitable. We are proud and happy to be a shareholder of CHOICE. We are also proud and happy to be a distributor of CHOICE products to HSBC customers,” said Chamberlain.

This life insurer is unique as it is the only one in the Indian life insurance industry with three financial institutions as its shareholders – all the three are doing distribution and the entire venture being 100 per cent bancassurance model.

“We are in a good space where the banca model is highly successful with the support of three shareholders,” said Mathur.

As of March 31, 2019, CHOICE had an embedded value of ₹2,575 crore. Narayanan felt there were ample opportunities for growth, given that the three banks together had about 10-crore customers in India spanning 10,000 branches.

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