Chennai, June 17 One of the interesting aspects of the HDFC Standard Life Insurance Company Ltd's acquisition of Max Life Insurance is the possibility of Axis Bank selling the former's policies, industry officials say.
"Today Axis Bank and HDFC Bank are competitors in the banking space. Axis Bank is the bancassurance partner for Max Life Insurance, like HDFC Bank for HDFC Standard Life," a senior official of a private life insurer told IANS, preferring anonymity.
Axis Bank also holds a just below five per cent stake in Max Life Insurance.
On Friday, Housing Development Finance Corporation Ltd (HDFC) in a regulatory filing in the BSE said the Board of Directors of HDFC Standard Life Insurance at a meeting on June 17, 2016, has approved entering into a confidentiality, exclusivity and standstill agreement to evaluate a proposal for a potential combination through a merger of Max Life and Max Financial Services with HDFC Standard Life by way of a scheme of arrangement.
Explaining the proposed deal to the media in Mumbai, Analjit Singh, Founder of the Max Group, said: "First Max Life Insurance will merge with Max Financial Services - a listed entity. Then Max Financial Services will be merged with HDFC Standard Life which ultimately will become a listed company."
According to Deepak Parekh, Chairman, HDFC with HDFC Bank and other banks as bancassurance partners for HDFC Standard Life and Axis Bank as a major distribution partner for Max Life, the proposed combined entity will have a strong bancassurance channel.
What is interesting to note apart from the regulatory approvals for the proposed merger is whether Axis Bank would start selling insurance policies of HDFC Standard Life.
Since Axis Bank and HDFC Bank are competitors in the banking space in and the former selling HDFC Standard Life's product might create some confusion in the minds of prospective policyholders, the official said.
Interestingly Axis Bank is headed by Shikha Sharma, who earlier headed ICICI Prudential Life Insurance Company Ltd, a fierce competitor for HDFC Standard Life.