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Life insurance companies are approaching DCB Bank (formerly Development Credit Bank) for a bancassurance tie-up, as the lender’s current contract with Birla Sun Life Insurance is coming up for renewal soon.
Several life insurers, including Reliance Life Insurance, HDFC Life and Max Life, apart from the current partner Birla SunLife, are pitching to rope in the bank as a distribution partner. Birla Sun Life and Reliance Life did not wish to comment on this. E-mails sent to HDFC Life and Max Life went unanswered as their spokespersons were not available.
“The present contract is coming up for renewal. As a practice, we will look at various options and study the pros and cons before taking a decision,” said a top official with the bank. Typically, bancassurance tie-ups are for three years, after which contracts are renewed. According to norms, a bank can sell one life and one general insurance company’s products.
Birla Sun Life Insurance has had a bancassurance partnership with DCB Bank since 2003.
A bancassurance tie-up helps insurance companies sell products through bank branches. This gives them access to the entire customer-base of the bank, to which insurance products can be sold.
DCB, which had 145 branches in India with a balance sheet size of Rs 14,800 crore as of December-end 2014, is relatively smaller in size among Indian banks. It is promoted by the Aga Khan Fund for Economic Development & Platinum Jubilee Investments Ltd, which holds 16 per cent stake in the bank.
Almost all the private and public sector banks either have joint venture agreements or are corporate agents of insurance companies. ICICI Bank, HDFC Bank, Axis Bank, State Bank of India, Punjab National Bank, Oriental Bank of Commerce, and Canara Bank are corporate agents of companies. This restricts them from tying up with more than three insurance companies (one life insurer, one non-life insurer and one standalone health insurer).
With these banks having already tied up with existing players, newer players did not get a bancassurance partner. On the other hand, players such as Canara HSBC OBC Life Insurance, which has three bank partners, depends entirely on the bancassurance channel to procure business.
The share of corporate agents in the new business premium procured by private life insurers was significant at 47.6 per cent in 2013-14 (49.1 per cent in 2012-13), according to the Insurance Regulatory and Development Authority of India’s Annual Report.
Birla Sun Life collected total gross premium of Rs 2,207.6 crore for the April-September 2014 period, compared to Rs 2,043.3 crore in same period in the previous financial year. The bancassurance channel was the second-largest contributor to individual new premiums - just behind the agency channel during that period.
Several life insurers, including Reliance Life Insurance, HDFC Life and Max Life, apart from the current partner Birla SunLife, are pitching to rope in the bank as a distribution partner. Birla Sun Life and Reliance Life did not wish to comment on this. E-mails sent to HDFC Life and Max Life went unanswered as their spokespersons were not available.
“The present contract is coming up for renewal. As a practice, we will look at various options and study the pros and cons before taking a decision,” said a top official with the bank. Typically, bancassurance tie-ups are for three years, after which contracts are renewed. According to norms, a bank can sell one life and one general insurance company’s products.
Birla Sun Life Insurance has had a bancassurance partnership with DCB Bank since 2003.
A bancassurance tie-up helps insurance companies sell products through bank branches. This gives them access to the entire customer-base of the bank, to which insurance products can be sold.
DCB, which had 145 branches in India with a balance sheet size of Rs 14,800 crore as of December-end 2014, is relatively smaller in size among Indian banks. It is promoted by the Aga Khan Fund for Economic Development & Platinum Jubilee Investments Ltd, which holds 16 per cent stake in the bank.
Almost all the private and public sector banks either have joint venture agreements or are corporate agents of insurance companies. ICICI Bank, HDFC Bank, Axis Bank, State Bank of India, Punjab National Bank, Oriental Bank of Commerce, and Canara Bank are corporate agents of companies. This restricts them from tying up with more than three insurance companies (one life insurer, one non-life insurer and one standalone health insurer).
With these banks having already tied up with existing players, newer players did not get a bancassurance partner. On the other hand, players such as Canara HSBC OBC Life Insurance, which has three bank partners, depends entirely on the bancassurance channel to procure business.
The share of corporate agents in the new business premium procured by private life insurers was significant at 47.6 per cent in 2013-14 (49.1 per cent in 2012-13), according to the Insurance Regulatory and Development Authority of India’s Annual Report.
Birla Sun Life collected total gross premium of Rs 2,207.6 crore for the April-September 2014 period, compared to Rs 2,043.3 crore in same period in the previous financial year. The bancassurance channel was the second-largest contributor to individual new premiums - just behind the agency channel during that period.
