LIC arm, United India tie up for bancassurance

LIC HFL Financial Services, a subsidiary of housing mortgage lender LIC Housing Finance, on Monday tied up with public sector insurer United India Insurance for distribution of non-life products of the latter.

The distributor is targeting a premium of Rs 1,000 crore in the first 12 months. LIC HFL sells life insurance products of its parent company Life Insurance Corporation of India (LIC). According to the norms, corporate agencies are allowed to sell insurance products of one life and one non-life insurer.

“We would like to start with retail, and then, get into institutional and corporate,” said Sobhana Murali, CEO, LIC HFL Financial Services. It is a wholly-owned subsidiary of the housing finance lender, which is into non-fund based activities like marketing of housing loans, insurance products, credit cards, mutual funds and other third-party products.

 

Banking license
LIC Housing Finance will apply for a banking license, and is awaiting the guidelines on new banking licenses.

“We are waiting for the guidelines to be released by December. We will be happy to apply for the banking license,” said Ramachandran Nair, director and CEO, LIC Housing Finance.

“We have given our feedback on the new banking license. We said if financial inclusion was the objective of the regulator, license should be given to one who is capable of penetrating into the market. Secondly, the company should be in a strong financial position and track record in financial market,” said Nair.

The company is looking at such areas as financial services and venture capital fund. It has applied for a venture capital fund license to the capital market regulator. Nair expects the fund to be in place within a month.

The company is targeting disbursement of Rs 20,000 crore, as against Rs 14,853 crore logged the previous year. The lender has raised lending rates by 50 basis points to 13 per cent from October . Nair said cost of funds have gone up by 100 basis points since March.