Icici Pru Rolls Out First Bancassurance Offering

ICICI Prudential Life Insurance Company has started offering bancassurance (offering insurance through banks) products.

Its first offering is a pre-approved life insurance product that is channel-specific to 'preferred' customers of its bancassurance partners. The term-assurance product carries with it an accidental-death benefit, named EasyLife. The policy is offered under the direct-mailer channel.

Initially, the product will be offered to customers of ICICI Bank, and later would be extended to customers of other bancassurance partners: Bank of India, Federal Bank, South Indian Bank, and Allahabad Bank.

"We are offering low-cost insurance cover to those who are perceived as good customers of ICICI Bank to start off with. Later, the customers of other banking partners will be included. We are also in talks with a foreign bank," said Saugato Gupta, chief marketing officer.

 

"As the customers are pre-approved by the insurance company, the premium rates are cheaper."

Customers are segmented on the basis of age, income and lifestyle, and the direct-mailers sent after fixing eligible insurance coverage for the individual.

A 30-year old can avail of a 10-year, Rs 10-lakh, term cover for Rs 479 per quarter. Unlike in the case of most of the term-assurance products, the customer does not need to undergo any medical examination.

On the possible risks faced by the insurance company offering such as the above-said product, an sector analyst said, "By offering a pre-approved term product without undertaking any medical examination, the company runs the risk of anti-selection. In the eventuality of some of the "selected" customers not opting for the coverage and those running higher risks, such as smokers or heart patients, the company could face losses higher than those anticipated."

ICICI Prudential, however, has capped the age of entry at 40, term of the cover at 10 years and sum-assured at Rs 10 lakh.

As competition is growing in this segment with the entry of new players, companies are getting into segmentation, wherein they target specific type of customers.

For instance, the loan-cover term assurance of HDFC Standard Life is aimed at HDFC housing loan borrowers, where the insurance coverage has to match the term and reducing loan amount.

Other insurance companies that are segmenting are: Tata AIG and Bajaj Allianz, through their respective bancassurance partners, HSBC and Standard Chartered Bank.