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Interview of Sam Ghosh, CEO,
Bajaj Allianz General Insurance
Though a number of insurers have already tied up
with banks to capitalize on the bancassurance channel, not
much seems to have happened on that front. Your comments
pls.
Bajaj Allianz has tied up with 6 Banks viz. Bank of Punjab,
Bank of Rajasthan, Jammu & Kashmir Bank, Lord Krishna
Bank, Karur Vysya Bank and Punjab & Sind Bank - the
1st Public Sector Bank to tie up with us. Bajaj Allianz
is the only private general insurer to have tied up with
6 bancassurance partners. And so far we are happy with the
performance of this channel of distribution for our products.
How long will it take for the bancassurance channel
to pick up pace?
This channel is very popular abroad. Since it is a new
channel in India, it will take some time to pick up. Almost
for every bank the concept of selling insurance as a product
besides their bread and butter business of deposits is a
challenge in itself. So it will take some time to pick up.
There being a major difference in the focus and
the model followed by an insurance company and a bank how
far will bancassurance contribute majorly to your insurance
business?
Bajaj Allianz is certainly looking at the Bancassurance
model for growth. We choose our Bancassurance partners who
share the same ideology of doing business. We then provide
training to bank personnel and help them in passing the
mandatory IRDA exams to become a corporate agent.
Insurance is a product that is sold not bought
in our country and needs hard selling but banks have never
been aggressive about selling financial products. In such
a situation how far will bancassurance succeed?
Yes there lies the challenge. A number of products are
essential in todays customers like motor, health insurance
etc.. Insurance is a fee based increase for banks as well
as ensuring that the customers comes to the bank for all
his financial needs.
For bancassurance to be really successful, dont
you think the respective bank has to be a one stop shop
for all financial products and not only a single product?
It depends upon the bank on what are the various financial
products that they would like to offer their customers.
Face to face contact with the customer is one of
the factors that can work in favour of bancassurance but
with technology advancing at a rapid pace telebanking, internet
banking ATMs etc are the rule of the day.
In such a situation how far will bancassurance
be a success?
In fact Bajaj Allianz is also targeting such tech savvy
customers. The Banks are in regular touch with their customers
anyway either through the ATMs, internet banking etc.. and
hence the bank can at least inform their
customers about the insurance products. Once the customer
evinces keen interest the product features can be explained
to them. Again in order to issue the policy they need not
visit our office, but the bank branch can issue the policy
from their office itself.
Will the products sold through bancassurance be
any cheaper? Will bancassurance products be designed differently?
We always aim for customized solutions and the best products
for our customers irrespective of the distribution channel.
Since there are some products, which are still tariffed,
we as a company cannot do much to make such products cheaper.
An insurance company using a Bank's distribution network
will
inevitably have a lower cost base, as the insurance company
does not have to set up the same with recurring fixed costs.
In the non-tariff products it could be possible to offer
products cheaper through the Bank channel.
Which are the other insurance distribution channels
you have been exploring and how much have they contributed
business wise?
As of now the Bancassurance channel have contributed nearly
6% of the total premium income. We are sure that this channel
would pick up in the near future.
We have other channels of distribution also like DSAs,
Motor
manufacturers, NBFCs, Travel Agents besides the Agents and
Brokers.
In case of claim settlement will banks take the
responsibility or will the customer have to approach the
insurer?
The customer can either contact the respective branch office
of the bank or inform our respective office as per the convenience
of the customer. We have drawn an elaborate process flow,
which has been circulated to each office of our Bancassurance
partner.
Which are the banks you have tied up with for bancassurance
and how many branches do they have?
Bajaj Allianz has focused on targeting banks, which are
strong in niche areas. For instance we tied with J &
K Bank, which is very strong in the North and Karur Vysya
Bank, which is strong in the South. We have also tied up
with Punjab & Sind Bank - the first PSU bank to tie
up with a private insurance company.
Are you targeting any given segment of the population
for bancassurance products? Why?
We are targeting the retail segment and that is the primary
reason for the tie-up. With our tie-up with the banks, we
are targeting the bank's customers.
What are the factors you consider before tying
up with a bank for bancassurance?
Regarding bancassurance partners we are very strict to
ensure that we share a common goal of providing an efficient
service to our customers.
How many policies have you sold so far and what
is your target for this fiscal?
We have sold considerable policies during the last fiscal.
This year we intend to have more such tie-ups and so we
would expect the business through this channel to grow.
What is your market share?
Bajaj Allianz is the leading private general insurance
company. During the last year we issued over 8,00,000 policies
which would be equal to all the policies sold by all the
private general insurance companies put together. We have
just started and are in to 3rd year of our operations and
so it is early to talk of market shares.
How many agents do you have on your roll?
We have over 1000 agents which includes corporate
agents also.
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