July 16, 2010
ING Vysya Life Insurance Co. Ltd., a life joint venture of ING Groep N.V., is looking to grow its life business five-fold in the next five years, supported with investment in the expansion of distribution and operations.
The company's board has approved the infusion of 2.4 billion rupees (US$51.4 million) in additional capital in the 2010 financial year to fuel growth, said Ignacio Aguila, regional head of commerce at ING Asia Pacific.
"Over the last 18 months, ING Life India has focused on consolidating the business and strengthening its foundation," said Aguila. The company is "ready to embark on its next phase of growth" in the market.
The Dutch insurance group "sees its Asia/Pacific business as leading the growth in insurance worldwide," and India is "uniquely placed to capitalize on this growth," said Aguila. The company aims to increase its customer base to more than 5 five million in India in the next five years.
"This growth will come from expanding the current distribution network and building further on productivity," said Aguila. The insurer is distributing products through a network of 55,000 agents and 232 locations across India. It also has a bancassurance alliance with ING Vysya Bank, a banking unit of ING Group.
ING Life India's total premium income saw a 40% annual compound growth rate in the past five years, reaching 16.4 billion rupees in the 2009 fiscal year. Its assets under management rose 66% annually, totaling 45 billion rupees.
With an anticipated annual growth rate of more than 17%, Aguila said "we see a huge opportunity in the Indian market," supported by strong economic growth and a supportive regulatory environment.
A pending government proposal to increase foreign direct investment in joint ventures from 26% to 49% could make "a huge difference" to India's insurance industry. "We will evaluate our options, once the foreign direct investment increase is approved," said Aguila.
ING Life India is a joint venture mainly between ING Group and local manufacturer Exide Industries of India, with 26% and 50% shareholdings in the venture, respectively. The life insurer offers traditional life, savings, retirement and investment-linked insurance products for groups and individuals in India.
In rural areas, ING Life India has teamed up with more than 200 cooperative banks across the country. "The company is actively looking at increasing its reach through more such active partnerships," said Aguila.
India is an attractive emerging market, but with unique challenges. "Building the brand in this market with diverse geographic and population takes time," said Aguila.
(By Iris Lai, Hong Kong bureau manager: Iris.Lai@ambest.com)
From InsuranceNewsNet.Com published on July 30, 2010 12:20:00 IST
