Private life insurer Reliance Nippon Life Insurance Company Ltd, part of Reliance Capital, is on the lookout for a suitable acquisition that would scale up its distribution network, said a top Reliance Capital official on Monday.
"We are interested in small life insurer promoted by banks or the one with distribution tie-ups with banks," Reliance Capital's Executive Director and CEO Sam Ghosh told IANS over phone from Mumbai.
According to him, Reliance Nippon Life is primarily an agency-driven company and would like to expand its distribution width.
He said there are some bank-promoted life insurers in the market and the company can look at them for acquisition if their promoters are also willing to sell.
Acquisition is part of the company strategy to scale up its distribution network aggressively, especially using the bancassurance (banks selling insurance policies) route, Ghosh added.
"The life insurance space in India has over 20 insurance players and there is bound to be consolidation in this sector. We are open to value accretive acquisition in this space, especially with a view to strengthen our distribution network and would be keen to acquire companies with strong business model and bancassurance channel," he said.
Reliance Nippon Life has over 770 offices with around 80,000 advisors/agents.
The company is amongst the very few insurers not to have a bancassurance tie-up. However nearly 50 per cent of the business for the Indian life insurance sector is from the bancassurance channel.
Reliance Nippon Life Insurance reported a 10 per cent increase in its renewal premium to Rs 776 crore, new business premium of Rs 215 crore and total premium of Rs 981 crore for the quarter ended December 31, 2016.
The company's persistency or the renewal ratio has also gone up to 61 per cent last quarter.
Previously, a bank could only tie-up with one life insurer which restricted options for investors and was also responsible for mis-selling through this channel.
Later the insurance regulator announced guidelines to open up bancassurance architecture in the life insurance space allowing one bank to tie-up with multiple banks with a purpose to provide options to customers.
However, the policy has not found many takers as the bulk of business of top six players continue to come from their bancassurance partners.
"We are also in talks with various large banks for a bancassurance tie-up and hope to have few large banks as our distribution partners soon," Ghosh added.
The Reliance group entered the life insurance sector acquiring AMP Sanmar Life Insurance several years back.
--IANS
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