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Q&A: Sandeep Ghosh, CEO, Bharti AXA Life Insurance

'No decision yet on using the Reliance brand name'

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Reliance Industries’ acquisition of Bharti’s stake in insurance ventures marks the entry of India's most valued company into the sector. Sandeep Ghosh, chief executive of AXA Life Insurance, tells Dipta Joshi even though Reliance is expected to be involved in strategic decisions, the operating control would remain with AXA. Edited excerpts:

has agreed to buy Bharti's share in both life and general insurance segments. When would the formal announcement be made?
We have the competition commission’s approval and would be filing a formal application with the Insurance Regulatory Development Authority soon. The formal change of shareholding would happen after its approval. In the interim, it’s business as usual. We continue to pitch for deals, new partnerships with banks and expand business. To the extent possible, the staff of the operating entities is being fenced from activities related to shareholding change.

What role would Reliance Industries play in the new entity?
The operating control of both the joint ventures was with AXA in the case of Bharti, and would continue to be with it even after Bharti’s stake is divested, in favour of Reliance. Reliance would essentially have an equal representation on the board and would be involved in all major strategic decisions. But day-to-day operations would rest with AXA.

Has the rebranding process begun? What would the new entity be called?
We are not yet there in terms of the final brand name, though there are a number of options. Given there is another company in the life space that uses the name ‘Reliance’ in its primary brand, we would not be able to do that. So, we would have AXA in the primary brand.

Recently, we saw selling 26 per cent stake to Nippon Life for Rs 3,062 crore. Bharti's 74 per cent stake sale reportedly accounted for Rs 1,665 crore—a much lower value.
I can’t comment on valuations. Our general insurance is in its third year of operations and the life business has just completed its fifth year. Companies like Reliance Life have been around much longer. What Nippon is paying for Reliance Life is a function of the size of Reliance Life’s business.

What would the biggest challenge for the new entity be?
Building scale in distribution remains our biggest challenge. We are one of the few life insurance companies that do not have major bancassurance partnerships. Both in terms of scale and profitability, we need to get such partnerships.

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