Cardif SA, the foreign equity partner in SBI Life Insurance Company, is keen to set up an asset management company (AMC) in collaboration with its Indian partner, State Bank of India (SBI).
The idea behind a mutual fund is for introducing unit-linked products in the Indian market at a later date. Most of the private insurers in the Indian scene have set up AMCs with equal stakes for both partners.
Cardif president director general Paul Vilemagne told Business Standard: "We will go for a mutual fund in India to introduce unit-linked products, which we feel will be very successful in the Indian market."
SBI Life Insurance formally launched its first product - Sanjeevan- in the market on Friday. Sanjeevan, a single premium money-back policy, is targetted at those who have opted for voluntary retirement scheme (VRS). The next product on the anvil is aimed at the bank's customers who have taken housing loans and would be offered a life cover that would include the repayment of the loan in the case of death of the borrower.
SBI Life will primarily focus on simple, relevant and innovative risk products tailored for each segment of the population. "The idea is to cross-sell our risk products with banking products, which would meet savings and protection needs of customers," said R Krishnamurthy, CEO, SBI Life.
Even as SBI Life professes that it will not be competing with the incumbent, Life Insurance Corporation of India, SBI chairman Janaki Ballabh stressed on the fact that utilising a bancassurance platform for the sale of insurance products would "lower costs in terms of distribution which would be passed onto the customer".
"We are uniquely placed by way of our delivery channel that we command" in terms of SBI and its associate banks' combined network of 13,000 branches, he added. A key preference for Cardif of France to tie up with SBI was on account of its huge network, which is the largest in the world.
The bank is however awaiting the necessary modifications to be made in the Insurance Act before it can sell products using its branch network. "We will see a quantum jump in sales once the amendment is made and we are allowed to use our branches," said Ballabh.
Confident of bancassurance succeeding in the Indian scene, Vilemagne said: "I see India today like what France was a few years ago". He outlined the similarities in the area of tax advantages offered, people's need for long-term savings for retirement benefit, and India's huge banking network that is similar to that existing in France.
