ING Vysya Life Insurance Company has triggered a price war in the life insurance industry by pricing its products up to five per cent lower than competitors.
Ton G M van der Star, the company's managing director and chief executive officer, said: "This will be our selling point. We offer value for money at lower prices and still with the trust secured with a big group".
ING International BV, the foreign partner in the joint venture, aims to capitalise on its experience in building companies in various countries, and ensuring competitiveness in each market.
"Our low administration costs is our key advantage," said van der Star. ING Vysya intends to be at the lower end of the market with plans to introduce four new products each year. Since its launch last back, the company has introduced three life products with four riders in Delhi, Bangalore and Mumbai.
"We will start operations in Chennai and Hyderabad this year, and plan to expand to 25 offices by the end of the first year," said van der Star.
Even as ING Vysya has tied up with Vysya Bank, its key distribution channel will not be through the bancassurance route. "The existence of Vysya Bank is hardly noticeable, though its presence in the rural areas in the south will help us sell policies," said van der Star.
ING Vysya has not ruled out tie-ups with other banks for the sale of life products and van der Star does not expect bancassurance to take off in a big way in the Indian market.
"It will take at least a decade for "tellers to be sellers"," he said. This follows the need for a change in the mindset of the Indian banking industry.
"The 1.5 million customer base of Vysya Bank will be a good start for us, and will help us identify what kind of bancassurance products we can design to meet needs," van der Star said.
