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| Canara HSBC plans group insurance foray in FY11 |
| Vrishti Beniwal / New Delhi Nov 10, 2009, 00:37 IST |
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Canara HSBC Life Insurance is planning to foray into group insurance by the beginning of the next financial year. It is also working on products for high net worth individuals and the rural market and to bring volumes in a bid to double its premium income to Rs 1,000 crore by the end of the year.
The company, a joint venture between three banks — HSBC, and Canara Bank and Oriental Bank of Commerce (OBC) — is working on various products for these segments and will shortly seek the approval of insurance regulator Insurance Regulatory and Development Authority (Irda) to launch these. Its products for these segments will be different from its existing retail products.
“The group insurance market is fiercely competitive. There is a big opportunity for banks in the corporate sector because they already have a relationship with these customers. To begin with, you have to have a life product,” Harpal Karlcut, chief executive officer, Canara HSBC, told Business Standard.
Karlcut said the products were at various stages of development. The company, which sells policies only through the branches of its shareholder banks, is planning to apply for an Irda approval sometime in the January-March quarter and to introduce the products in the following quarter.
“Big companies look at the market much more aggressively than individuals. The sum involved is much bigger. I am told that in many lines, the margins are very thin… We have to train our people to service those customers,” he added. For tapping the rural market, the company is banking on its Indian partners, Canara Bank and OBC. It recently signed deals with three regional rural banks sponsored by Canara Bank.
The company was the fastest to cross Rs 500 crore in weighted premium income (within 14 months of operations). Now, Canara HSBC expects to double its business this year. It closed the last financial year (operating only for nine months) at about Rs 300 crore.
“We have already crossed Rs 600 crore. We will do Rs 1,000 crore by March-end. I’m sure this will be quicker than the first Rs 500 crore,” Karlcut said. “We have so far infused Rs 525 crore into the company. We have committed another Rs 200 crore this fiscal.”
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