New Delhi, Aug 7 (UNI) Canara HSBC Oriental Bank of Commerce Life Insurance Co Ltd, which kicked off its operations in June, has done a brisk business of Rs 25 crore in the very first month of its existence and has positioned itself among the top five players in the sector, a top Joint Venture partner said here today.
''Insurance has huge potential in India in view of its low penetration. We plan to be among the top five players in the life insurance segment,'' Ms Naina Lal Kidwai, HSBC Country Head, India, told newspersons here.
Ms Kidwai said the inroads made by the Public Sector major Life Insurance Corporation into rural areas have helped companies like the newly set up joint venture to penetrate rural markets.
The new company is a partnership between two of India's largest nationalised banks--Canara Bank and OBC--and HSBC Insurance (Asia Pacific) Holdings Ltd. The company became operational from June 16, 2008.
The company, headquartered in Gurgaon, is capitalised at Rs 325 crore. While Canara Bank holds the majority 51 per cent stake in the company, HSBC and OBC hold 26 per cent and 23 per cent stake respectively.
Ms Kidwai said the potential for the company was huge and ascribed this to a number of factors. The emergence of nuclear families, the growing incomes, the lack of a credible social security system and the high savings rate are some of the reasons for this.
She said the new company aspires to be one of the top players in the life insurance field and will leverage the niche areas of each of the joint venture partners. The combined synergy would be phenomenal.
Ms Kidwai said HSBC has substantial experience to go by, having sold the products of Tata AIG for sometimes now.
She compared insurance business to that of the telecom revolution.
Just as people were sceptical of its potential, there were doubts as to how far the private players would go. But the telecom revolution has made deep inroads into the rural areas and has helped improve their quality of life.
Similarly, private players in the insurance field will be able to make a dent in the rural areas.
In this regard, she referred to the presence of Canara Bank and OBC in rural India, which would enable the new company to penetrate even remote areas of the country.
Ms Kidwai said the break up of the joint family and the emergence of nuclear family would help insurance growth.
For instance, children could buy insurance products for their parents. Besides, the older folks would buy an insurance product to serve as a security.
Ms Kidwai said the high savings rate of more than 30 per cent would also help growth of the insurance sector. Much of the savings rate does not pass through institutional mechanisms. This resource needs to be tapped.
Ms Kidwai said the name of the new company was selected after considerable research. It was felt that the venture which has the names of all three formidable players would be the best bet.
UNI GS SR HT1302