Central Bank partnership to boost bancassurance: FGILI MD & CEO Alok Rungta

Alok Rungta, managing director and chief executive officer, FGILI, talks about the impact of the bancassurance channel and the company's growth strategies

As the Central Bank of India completes at 25.18 per cent stake acquisition in Future Generali India Life Insurance (FGILI), making a foray into life insurance, Alok Rungta, managing director and chief executive officer, FGILI, talks to Aathira Varier in a virtual interview on the impact of the bancassurance channel and the company’s growth strategies. Edited excerpts:

 

How will the partnership with the Central Bank of India augment business for FGILI?

 

It will be positive. We will look at rebranding, which is positioning the brand identity in a new manner. Second, bancassurance distribution in the country has outpaced the growth of other channels in life insurance, and we have discussions on this with the Central Bank. This will be our first large-size bank partner, and hence, the partnership will be a game-changer for us.

 

How will the partnership improve the share of bancassurance in two-three years?

 

It will be significant, and one of the biggest channels in the organisation over a period of time. It will take us two-three years to build it, but it will be significant, given our pace. Our mix will reflect a mix of many other large-scale banks.

 

At a time when premium growth through the channel of public-sector banks has been slow, do you expect significant growth from the bancassurance partnership?

 

When you drive, once you attain a particular speed, you go flat. But in our case, we are starting from zero. So, we need to reach that peak before we go flat. We don’t see that challenge for us immediately in the next two-four years because we have to first start getting business and get a good market share, and then there could be a reason for people to go flat. 

 

With this partnership, what are the growth targets for FGILI in the upcoming years?

 

In the last two years, we grew at 12-14 per cent, based on various parameters. We have always wanted to outgrow the industry. If the industry is growing at 10-15 per cent, we always aspire to grow at 15-18 per cent.  I think that is normal and that should happen without the bank. But as a large bank joins, there will be multiplier growth in the coming three-five years. It is not going to be a standard 18-20 per cent growth rate.  This is because we want to keep growing our current channels. So, they may grow at that pace.

 

The loss for the insurer came down steeply in FY25 from the previous year. Do you expect to break even by FY26?

 

It will be difficult to break even. There will be a lot of branding and rebranding exercises to be undertaken. In every corner of the country, wherever our brand is present, we have to change the brand. We have to get people on board to service the 4,500 branches. While we were almost nearing profits last financial year, we will have to see one more dip before. 

 

In an environment of interest rate reductions, what are your plans for your product mix?

 

We want to maintain a healthy size of a non-participating (non-par) portfolio. But we also want to push categories where we are not big, that is where new markets and customers will come. That will automatically reshuffle the mix in the organisation. Currently, non-par is over 70 per cent, 14-18 per cent is par, and the balance is term and Ulip (unit-linked insurance plan). We do believe that non-par can be 50-60 per cent. As we grow, over 20 per cent would be Ulip, a similar share for par. But this will take some time, depending on the profiling and aptitude of Central Bank customers.