Canara insurance arm may break even for the first time at end of this year

Canara HSBC Oriental Bank of Commerce Life Insurance Company will observe its tenth anniversary in June and the company will break even for the first time at the end of this year, senior executives say. 

The life insurance company was floated together by Canara Bank (51 per cent), Oriental Bank of Commerce (23 per cent) and HSBC Insurance (Asia Pacific) Holdings Limited (26 per cent), and received its licence from the regulator in June 2008. Gaurav Seth, the company’s chief financial officer, told Business Standard: “The last one year has been extremely good for us. In terms of our top-line growth the retail business has grown by over 35 per cent, and our premium growth, which includes renewals, has grown by over 21 per cent.”

“Our profits are likely to touch the Rs 1.5 billion mark for the year,” Seth added. In 2017-18, till February, the company earned Rs 10.74 billion in premium revenue, which grew by 32 per cent as compared to the total premium revenue earned during the same period of the previous financial year. 

“The growth this year mainly comes from non-metros as we focused on penetrating the Tier-II, Tier-III and non-metro markets,” said Tarannum Hasib, the chief distribution officer. 

Between the three banks, the life insurance firm has access to over 100 million customers. In addition to the three shareholder banks, the insurer has tied up with Dhanlakxmi Bank, CanFin Homes, and two regional rural banks.

Tapping these potential customers and servicing their needs, through these banks and financial instructions, and thereby improving penetration, is the mainstay of the company’s growth strategy, said Seth. 

“I feel that this unique ‘sangam’ (of three shareholder banks), and gives us a brilliant scope to continue to grow, penetrate and increase our valuations. The exclusivity of our partnerships plays a huge role in growing the company,” he said.

During the quarter ended December 2017, the company registered a loss of Rs 2.87 billion, as compared to a loss of Rs 4 billion in the same period of the previous year. By the end of this financial year, the firm will write off all the accumulated losses from the past, said two senior executives.