What do ICICI Prudential, Dabur CGU, Om Kotak Mahindra, Bajaj Allianz, and ING Vysya have in common? Well, all of them -- and a few other insurance players -- are setting up offices in the same area.
The Prabhadevi-Lower Parel belt in central Mumbai is fast becoming an 'Insurance City'. The key driver has been the need to offer easy assessability to the life advisors (read agents). Another contributing factor is the low real estate rates.
Dadar and Parel offers easy approach road for the life advisors who would be tracking down from Borivali in western suburbs or Chembur in central suburbs on a daily basis to submit the premium cheques of their clients, said ING Vysya general manager (west) Anil Bhatia.
SBI Life Insurance is also planning to set up its office in Worli as is Tata AIG Life Insurance for offering better assessability to its agents, said officials.
The clustering of life insurers is unique in Mumbai. With the regulations pertaining to corporate agents and the bancassurance channel hanging in abeyance with the Standing committee of Parliament, life insurers have no option but to use the tied agency channel to market their products. Hence, easy accessibility to agents is the prime factor to decide on the location.
In future, when life insurance companies set up more branches in the city and set up collection centres as in the case of banks' ATMs, the importance accorded to Lower Parel may not be all that high.
"This realty issue is more stark in Mumbai as huge space is available in this area. Customer relationship management and processing will be the key differentiators and for this space is imperative," said SBI Life Insurance chief marketing officer S Muralidharan.
Large mills, which have closed down, are now being refurbished to house many different segments of the industry. Insurance companies are just one of the many, which have been attracted to the mill area.
ING Vysya, which is shifting from Nariman Point to Prabhadevi, is moving into a 5,000-square foot area from its present 1,500-square foot office just above ING Barings. Similarly, Om Kotak has taken up a huge area at Kamla Mills in Lower Parel, where it also houses its training centre.
"Apart from easy assessability for the agents which is a key determinant, the new buildings and construction coming up in this centrally-located area have better fire protection systems," said Dabur CGU director (human resources) Celine George.
"It is necessary to create a balance between assessability and cost of property," said ICICI Prudential Life managing director Shikha Sharma. The cheapest real estate in the country's financial capital is at Lower Parel, where Om Kotak Mahindra is paying a monthly rental of Rs 70 per square foot. Property in the northern suburbs -- Bandra Kurla area -- is commanding a higher monthly rental of Rs 100.
There are a few exceptions too. Max New York Life has an office in Fort, while Birla SunLife has set up its main office in Andheri and another in Marine Lines. Reliance Life Insurance, which has yet to commence its operations, is located at Nariman Point.
Said Bhatia: "Our next stop is further down to the suburbs as we wish to be closer to the customer. We plan to expand to Borivali and Chembur where there are a more number of retail customers".
