Indian Bank support for life insurance foray

Indian Bank has officially initiated its foray into the life insurance business with the invitation of request for proposal (RFP) from consultants to help its foray into the sector. The bank early this year said that it had received expression of interest from a few foreign players and domestic players to partner it in the life insurance foray.

Life insurance business in India is a highly crowded sector with the attendance of almost 23 players, including the market leader LIC. The first year premium collected by the life insurance firms saw a 23(%) per cent jump to Rs 1,03,875 crore during the April-February 2011 period against Rs 83,889 crore in the corresponding period the previous year.

However, there has been an 8(%) per cent drop in the number of policies sold, to 3.91 crore for the period April-February 2011 against 4.26 crore sold in the corresponding period the previous year. This has largely been attributed to the uncertainty relating to Ulip sales and the subsequent imposition of stiff regulations.

Indian bank has a bancassurance division through which it sells life insurance, non-life insurance and mutual fund products. “However the true potential for sale of life insurance products has not been fully exploited. With a view to participate in the growth of the life insurance industry, the bank would like to rope in a suitable partner for undertaking this business,” the bank said, in its tender notice.

Indian Bank’s bancassurance pact with HDFC Standard Life Insurance comes to an end by this month while its non-life bancassurance pact with United India Insurance would continue according to company officials.