Aviva Life Insurance to add 91 branches in 07

Cairo, Egypt, October 31: Private insurer Aviva Life Insurance, the Indian arm of UK-based Aviva, today said it will add 91 new branches to its existing network in India by the middle of next year, taking the total to 192, besides announcing its tie-up with six more co-operative and regional rural banks in the country.

The company, which has a 26 per cent stake in Dabur India, will also more than double its Annualised Premium Equivalent (APE) to over Rs 600 crore next year, which in simple terms means 100 per cent of the regular premium plus 10 per cent of the single permium from new business, from the Rs 313 crore it reported last year.

Besides, it will also ramp up its Direct Sales Force to 31,000 Finance Planning Advisors (FPAs) from the current 14,000.

''We have already reported an APE of Rs 516 crore during the period between January to September, and are optimistic about crossing the Rs 600 crore mark by the year-end, as we are currently growing at 131 per cent,'' Aviva India Marketing Director Vivek Khanna told reporters on the sidelines of the Aviva Insurance Summit here.

The company presently has 23 existing bancassurance relationships with various banks in the country, of which 16 are with cooperative and regional rural banks, while the remaining are with private banks.

The six new bancassurance agreements Aviva India announced today are with Janaseva Sahakari Bank (Maharashtra), Patliputra Central Co-operative Bank (Bihar), Kakinada District Central Co-operative Bank (Andhra Pradesh), Dena Gujarat Gramin Bank (Gujarat), Bardhman Gramin Bank (West Bengal) and Ranchi Kunthi DCCB (Jharkhand).

With the six additions, Aviva now has a total of 29 bancassurance partnerships.

''We have already exceeded our targets and plans, and will beat our fourth quarter (ending December, 31) targets as well. However, I cannot divulge any further details on the investment, though it has already been agreed upon between Dabur and us in the 74:26 ratio. We will meet this expansion through capital infusion and not through debt, '' Aviva India MD Bert Paterson said.

On the increase of FDI in the insurance sector from the present 26 per cent to 49 per cent, Mr Paterson said, the current capital invested by private insurers is Rs 6,543 crore, while the capital of insurers with a foreign partner is Rs 5,994 crore, without including Reliance and Sahara Life, who do not have foreign partners.

If a 49 per cent cap on FDI was allowed and Indian promoters sold their stake to foreign players, total capitalisation will remain at Rs 5,994 crore, while FDI will be Rs 2,937 crore, which is an additional capital of Rs 1,414 crore.

While denying any plans to enter the non-life insurance sector which offers huge potential in India, he said the company's focus for the Indian market will continue to be on life and pension plans.

Aviva's paid up capital till September this year amounted to Rs 559 crore. The company pumped in Rs 139 crore in January this year and another Rs 100 crore in June, and does not have any plans to pump in any more money for this year.

''We will be infusing more capital next year,'' Mr Paterson added.

The company's bancassurance division accounts for almost 70 per cent of its total business, while the Direct sales force segment contributes to the remaining business.

The company primarily offers ULIP products to its customers, and has 11 ULIP products in all.

''As of now we have no plans to offer any new products, but as and when the need arises, we will definitely look at adding to our existing portfolio,'' the MD said.

Aviva also has plans to expand its BPO business in India. It currently employs 7,500 people employed in its BPOs spread across Noida, Pune and Gurgaon, though no further details were available on that front.

UNI