Burmans, Cgu To Invest Rs 200-300 Crore In Aviva Life

The Burmans of Dabur and international insurer CGU are planning to invest Rs 200-300 crore in their joint venture Aviva Life Insurance while exploring possibilities of foraying into mutual funds sector over the next five years.

"We started with an initial capital of Rs 110 crore. We may require additional Rs 200-300 crore in the next five years depending on the business growth," Aviva Life CEO Stuart Purdy said after announcing tie-up with American Express Bank and the launch of Aviva's first global product.

The additional capital infusion was required in order to comply with the Insurance Regulatory and Development Authority's stiff norms of maintaining a 150 per cent solvency margin.

CGU, managing assets of over $ 300 billion worldwide, also has plans to enter mutual fund business after its life insurance company strengthens its toehold, Purdy said.

Aviva life, the 74:26 joint venture between the Burmans of Dabur and CGU, has embarked on growth strategy mainly through tie-ups with banks and trained agents. The tie-up with Amercian Express is the fourth in the series. The insurer will provide life cover to Amex Bank clients and cardholders worldwide. Aviva has already roped in Canara Bank, Lakshmi Vilas Bank and ABN Amro Bank.

"We will be able to finalise tie-ups with two more banks within the next six months," Purdy said referring to the CGU group's legacy of expanding its business through bancassurance in the UK, Singapore, France, Italy, Australia and New Zealand.

The company also intends to open eight offices this year including two for rural areas which would be located in Guwahati and Asansol (West Bengal). Aviva has plans to add six offices every year for the next three years. It also intends to use the Dabur distribution network. Aviva flagged off its operations in the four metros and plans to foray into Bangalore and Hyderabad by July.

"The company is planning to come up with five rural insurance products. We are expecting Irda's clearance within 30 days," Purdy said, adding that permission has been received to launch eight products including some unit-linked plans.

Purdy also said the company had lined up 700 corporate agents to sell its products but was awaiting Parliamentary nod for passage of the Insurance Bill allowing agents to sell life insurance products.