Money & Banking

IndiaFirst Life Insurance says no news yet on stake sale by Union Bank

Mumbai | Updated on May 18, 2020

Gearing up for a post-Covid world, IndiaFirst Life Insurance remains upbeat about the demand for insurance and said it has not received any communication of a possible stake sale by Union Bank of India. “There is no news so far from shareholders on a possible stake sale by Union Bank of India. As of now, it is a shareholder with a 30 per cent stake. As per the amalgamation deal, all contracts with Andhra Bank have got transferred to UBI, including corporate agency,” said RM Vishakha, Managing Director and Chief Executive Officer, IndiaFirst Life Insurance.

Andhra Bank, which held 29.53 per cent stake in the insurer, was merged with Union Bank of India on April 1; under IRDAI guidelines, one promoter cannot hold stake in two insurance companies.

There have been reports that Union Bank, which also holds a 25.1 per cent equity stake in Star Union Dai-ichi Life Insurance, will pare its holding in IndiaFirst Life Insurance to less than 10 per cent.

In an interaction with BusinessLine, Vishakha noted that the merger of the banks almost coincided with the national lockdown and that the insurer is working with the new promoter. “It is going a bit slow because of the absence of physical contact and the very thinly populated staff coming to office. Banks are focussing on core activities right now,” she said.

Post-Covid strategy

Meanwhile, the private sector life insurer is gearing up to work in the post Covid-19 world. “There will be a lot more of digital and virtual world, and the challenge will be how to create trust with customers in the absence of too much physical contact,” Vishakha noted.

She is, however, optimistic about the continuing demand for life insurance products, despite the economic slowdown and pay cuts and the new income tax regime.

“The need for protection will go up. Amid market volatility, capital guarantee in life insurance will be appreciated far more in the current economic condition,” she noted, adding that attraction for guaranteed products will increase.

Furthermore, along with pay cuts, the discretionary spends of people will also go down as they will commute less for work and prefer to avoid crowded places.

Published on May 18, 2020

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