Tata AIG is looking at distribution alliances with companies which are Tata group's competitors.
In the case of insurance, the possibility of a tie ups with Maruti or other manufacturers exists while Tata Engineering would also be roped in. But we would be very selective about whom we chose," said Raj Raman, senior vice-president marketing, Tata AIG Insurance.
He said that among the Tata group companies, which would be roped in to distribute products, Tata Finance is a possibility given the fact that the company is already in the financial services business. The present guideline of the Insurance Regulatory and Development Authority stipulating a minimum 100 hours training for directors of distribution companies is holding back distribution tie ups.
Tata AIG is one of the three companies to have entered the life as well as non-life insurance business after the sector was opened up last year.
Raman said the insurance companies are looking at tie ups with manufacturers and channel partners for product distribution. He said that for meeting rural and social sector obligation, Tata AIG is looking at the prospects of distribution partnerships with non governmental organisations (NGOs).
IRDA has prescribed that life insurers should mandatorily sell 5 per cent of their policies sold in the first year in the rural sector with the proportion successively increasing from 7 per cent in the second year to 15 per cent, in the fifth year.
In case of general insurance companies the share of rural sector in the first fiscal of operations is 2 per cent of gross premium income which increases to 3 per cent in the second and 5 per cent from the third year onwards.
Insurance companies have devised various methods to meet the obligation which varies from tying up with co-operative societies in case of Iffco Tokio Marine General Insurance to tie-ups with non-governmental organisations (NGO) as ICICI Prudential has done.
Tata AIG Life Insurance Company has thus far sold around 1,500 policies since products were launched in April this year, while the non life insurance companies has sold over 5,000 policies, Raj Raman said.
He said that on the life insurance side, the average size of an insurance cover per person is Rs 60,000-65,000. Life Insurance Corporation's average premium per person is around Rs 42,000.
Tata AIG, which is present in Delhi, Mumbai, Chennai, Calcutta, Hyderabad and Bangalore, is planning to increase its operations to around 9 cities by the year-end. Among the cities where the companies could commence operations include Cochin, Pune, Guwahati, Ahmedabad and Chandigarh.
