Aegon Religare, the joint venture between Dutch major Aegon and Religare Enterprises, a financial services group promoted by the Singh family, the erstwhile promoters of Ranbaxy. The company’s CEO Rajiv Jamkhedkar spoke to Shilpy Sinha about the new entrant’s approach to garner business.
Are there any problems with Aegon since it ended its mutual funds joint venture with Religare?
There is absolutely no problem in the life insurance joint venture. The mutual fund business, in which Religare and Aegon had a 50:50 partnership, did not split. It happened when Religare acquired Lotus Mutual Fund and later merged with it.
Has the economic slowdown made you change your plans?
In India, there is definitely a slowdown. Companies, which posted a growth of 60-70 per cent have seen it slip to 20-30 per cent. So, when we say slowdown it is a relative slowdown and not absolute. India is an under-penetrated market, so the demand for insurance will always remain in the system.
Moreover, people have realised that growth is not that easy. Insurance is a long-term business and we have a long-term business plan. For us, the business plan does not change as we have a 10-year horizon. In the initial phase, we were not affected much because we had just launched. We are sticking to the plans we had before the launch. We have received Rs 35 crore premium income and hope to get Rs 100 crore by August.
How do you see 2009-10 from the insurance industry’s perspective?
Insurers will have to focus on some key issues. First, they will have to change their strategy and become more innovative with different modes of distribution and new forms of products as customers will be very choosy. Second, insurers will have to focus on productivity and profitability. So far, because there was a huge growth, a lot of inefficiencies were hidden in the system, but in a period of downturn people will focus on efficiency.
So, are you looking at some new distribution channels?
We have a multiple distribution channel strategy and we are a unique company to have such a system from day one. We have 42 agencies, 1,550 offices of Religare, six direct channel branches. We are looking at a tie-up with banks at a later stage. At present, we will try to leverage the present channels.
There are so many players in the market, in terms of products, how are you different from the others?
Product innovation ultimately depends on whether you are able to fulfill the needs of the customers. We do a need-based analysis. We ask people how much they spend now and tell them how much pension they will need in the future. At present, we have a bouquet of products ranging from guaranteed return product to a child plan and a pension plan.
What are the issues you would like Insurance Regulatory and Development Authority (Irda) to address?
The regulator has done some very good things in the last two years such as increased transparency, reduced capital requirement and new investment norms allowing insurers to invest more. Later, capital requirement towards solvency will be a constraint for the industry. Also, the regulator should allow agents to work for more than one insurance company.
