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Canara HSBC Life to shift focus to tier III, IV cities to grow business

For FY18, net profit grew 51% year-on-year to Rs 1.68 billion, with gross premiums rising 21% to Rs 27.8 billion

Advait Rao Palepu  |  Mumbai 

Canara HSBC Life to shift focus to tier III, IV cities to grow business

Canara HSBC Life Insurance Company, which has taken the bancassurance route to improve profits, now plans to focus on tier-III and tier-IV cities to grow its business.

Anuj Mathur, chief executive officer of the company, said, “We have done well through our bancassurance model. Our penetration has increased in the past three years and we are now entering tier-III and tier-IV cities. Our traditional insurance plans in the product mix will continue to increase¸ as customers in these areas are typically risk-averse.”

For FY18, net profit grew 51 per cent year-on-year to Rs 1.68 billion, with gross premiums rising 21 per cent to Rs 27.8 billion. “comes from two areas, one is bancassurance and the other is digital. While the latter is relatively small, we believe it will play a huge role in our Because banks are our primary distributors as well, we have seen a 34 per cent in individual new business premium, mainly coming from bank customers,” he said.

The introduction of (PMJJBY) — with the premium rate set by the government so that everyday people can purchase an insurance cover for the assured sum of Rs 200,000 — has introduced a new ‘affordable’ segment of products in the life insurance market.

With three banks as its promoters, bancassurance is bringing in business. Around 1.35 million Canara Bank customers have been brought on board in PMJJBY and another 450,000 customers will be on-boarded for the current year.

“We feel there is a huge market in the mid segment, in tier 2, 3 and 4 cities. If your product is affordable and competitive, like our recently launched point-of-sale product that includes a return of premium at the end of the term, growth is going to come from mainly these affordable products,” Mathur explained.

The company will launch a health product this financial year, subject to the regulator’s approval, which would cover cancer and heart ailments.

First Published: Sat, June 09 2018. 23:17 IST
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