Alpic group plans to enter the business of insurance premium funding by the end of this month through Allianz Alpic Finance Corporation, a 50:50 joint venture between Alpic and Allianz. Allanzers Distribution Services, the distribution outfit of Alpic group, will be the distributor of the product, which will initially be targetted at corporates and medical professionals.
"Many of the corporates cannot go for the insurance cover because of the huge premium attached to it. Insurance premium funding will help them as they will get the scope to pay the premium money in installments," said R Ravi, executive director of the company.
Besides the corporates, the company will target the high-value, credit-worthy medical fraternity, including hospitals, nursing homes, diagnostic centres and medical specialists, he said. Alpic would use Allanzer's database on medical professionals.
The new business will initially be for non-life insurance products, but will be extended to life insurance products in the second phase. According to Ravi, Allanzers will try to distribute the product to all its existing clients.
Claiming that Alpic will be the first to start this business in the country, Ravi said, "Innovation will be the way of existence for the non-banking finance companies in a changed environment. All the financial institutions and commercial banks have entered into the retail finance business in a big way."
According to a market survey done by the company, the domestic market for insurance premium funding is estimated at Rs 880 crore. However, Ravi feels that it will take another 5-8 years for the market to develop fully. The insurance premium funding has already a big market in the US, estimated at $14 billion.
