The life insurance sector is set to see a major competition on the premiums front with ING Vysya declaring that it expects to offer extremely aggressive pricing of insurance products to woo customers.
"We are targeting competitive premiums," ING Vysya Life Insurance managing director & CEO Ton G M van der Star told Business Standard.
A leading insurance and banking Dutch conglomerate, ING has tied up with Vysya Bank to float a joint venture insurance company along with GMR Vasavi Group. The company is expected to get its insurance licence by July-end.
"The pricing of the product is going to be one of the key factors of our strategy," ING Asia-Pacific chief executive officer and member of the executive committee Phillip R Shirriff said.
He said this could be achieved through a series of measures which includes, lower expense margins, better underwriting products and a more prudent way of doing business apart from better technology.
"All these leads to better pricing as the cost of doing business will be much lower," Shirriff said.
He said the joint venture expects to achieve a 12 per cent return on capital which is the global target for all ING's businesses.
Shirriff said the joint venture hopes to get a 5 per cent market share in 10 years with break even in the fifth or sixth year.
The company hopes to sell around 20,000 policies which could go up once the government allows banks to sell insurance products.
ING Vysya will have an initial capital of Rs 110 crore with an authorised capital of Rs 300 crore. ING has around 20 per cent stake in Vysya Bank.
Shirriff said the technology used in the Philippines would be deployed in India too. He said customers will be allowed add on more features to their individual policies to make it an omnibus policy.
The reason behind such a features was to make the policy work more for the customers. The pension policy too would be added on once the government gives clearance for the same, he said. "You have to sell insurance as a value-added product," Shirriff said.
Shirriff said the company's insurance advisers would carry out financial planning for the customers which will help them to take decisions on investments and savings.
"It is necessary for us to meet the customers' needs first," he said. The company also plans to unveil a product specifically designed for the rural market.
He said insurance agents would be given rigorous training and expect them to sell at least four policies every month.
ING Vysya has already hired around 260 agents. Their strength is expected to go upto 1,500 agents during the current financial year.
The turnaround time for getting an insurance policy is expected to be around four days, which is among the lowest in the world.
Shirriff said there was a huge potential for insurance players in India. "China gives licences for each province and not a national licence as it is in India. Hence, we expect the Indian market to grow faster than China," he said.
