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Edelweiss Tokio Life Insurance is gung-ho about the bancassurance channel and sees it as a growth engine for the company in the coming years, a top company official said.
The private life insurer is positioning itself to take advantage of the growth opportunities in this channel and is in talks with several banks, especially private sector ones, Deepak Mittal, Managing Director & CEO, Edelweiss Tokio Life, told BusinessLine in an interview.
Mittal was in the Capital for the launch of a new ULIP product ‘Wealth Plus’ that would be sold online (along with aggregator policybazaar).
The product, which is the first big launch on the direct channel side, is unique, in the sense a buyer gets bonus allocation points from day one.
Currently, Edelweiss Tokio Life has one Banca partner — Catholic Syrian Bank — which brought business of ₹30 crore last fiscal, out of the total new business premium (NBP) of ₹200 crore in 2016-17 for the life insurer.
Bancassurance now accounts for about 15 per cent of the total NBP. “We are hopeful this would increase to about one-third over the next five years. In the next 18 months, you will see us getting into more tie-ups with banks,” Mittal said.
Mittal also said that the agency channel (growing at 30 per cent and accounting for 65-70 per cent of NBP) has been fairly successful. “For this year and the next, the growth engine will be direct channel. Agency will continue to grow. In the next six-seven years, we want to be one-third each in agency, Banca and direct channels,” he said.
Industry league Mittal said the life insurer wants to get into the top-12 league in terms of industry rankings in the next three years. “We feel we can do this through organic growth. We are also open to inorganic growth,” he said. This company is currently at the 19th position in terms of ranking in NBP, according to Mittal.
In 2016-17, its NBP grew 50 per cent to ₹200 crore. “This year we should be hitting the ₹300-crore mark. We are hopeful of sustaining this 50 per cent growth for the next few years,” Mittal said.
Capital mop-up Mittal said the life insurer will go in for another round of capital raising (from its existing shareholders) this fiscal to fund business growth.
“We are currently capitalised at ₹1,320 crore, out of which ₹600 crore is free capital. We will double this free capital this year. We will raise another ₹600-crore capital and both shareholders are committed,” he said.
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