Canara HSBC Life Insurance, which is riding strong on its bancassurance model, wants to plumb deep into the large customer base of its promoter shareholder Canara Bank and is looking to double its penetration there from the current 1.5 per cent to 3 per cent over the next two years, Anuj Mathur, Managing Director & CEO, has said.
Mathur also said in the next 3-4 months, Canara HSBC Life Insurance will set up nearly 50 new standalone branches (besides the almost 10,000 branches of its shareholder banks), taking its overall branch network to 103 from 54 now.
The new physical branches of the life insurer are expected to enhance its footprint in Tier 2 and Tier 3 cities. They will be used both for customer service and for new business.
“Our decision to double the company’s branch network in next 3-4 months shows our confidence . You will not double up branches in three months if you are not very confident about business”, Mathur told BusinessLine.
Canara Bank, has a 51 per cent stake in Canara HSBC Life Insurance, and has a nearly ten crore customer base and a branch network of over 9,600 branches. HSBC has a 26 per cent stake, while the remaining 23 per cent is with PNB, which had subsumed Oriental Bank of Commerce under a three-way amalgamation.
This life insurer, which has completed fourteen years of existence and declared its maiden dividend in 2021-22, has now rebranded and renamed itself from Canara HSBC Oriental Bank of Commerce Life Insurance to Canara HSBC Life Insurance, as it charts its next leg of the growth journey.
“We will with new brand have a better customer connect. The new brand is a more vibrant brand than the previous one. In the past, our company name was too long and it was a bit of challenge to remember the name. Our new brand — which carries the brand of our two big promoter banks —is now quite vibrant and eye catchy”, Mathur said.
Along with the rebranding, the life insurer has after a gap of five years changed its tagline to “Promises Ka Partner”, reaffirming its positioning of being always with customer in the hour of their need.
Business performance
For the fiscal year 2021-22, Canara HSBC Life Insurance’s new business premium income on weighted premium income grew 32 per cent at ₹1,375 crore (₹1,045 crore). The life insurer’s gross written premium grew 15 per cent to ₹ 5,890 crore (₹ 5,116 crore).
“We expect our growth momentum to continue. Our growth this fiscal will continue to be superior to industry. We will be much ahead of what industry growth is going to be. Last fiscal we grew 32 per cent in individual new business premium income when industry grew 16 per cent. We see this trend this fiscal too”, Mathur said.
Mathur also made it clear that the life insurer was not looking to raise capital this fiscal year to support growth and pointed out that it had a comfortable solvency margin of 282 per cent as of March 31, 2022.
Canara HSBC Life Insurance had an Indian embedded value of ₹ 3,828 crore and has, for the first time, entered into a select club of life insurers with a value of new business (VNB) margin of over 20 per cent.
Asked as to what helped the life insurer post superior operating performance in 2021-22 in the difficult times, Mathur said “There was lot of support from shareholders. Our banca model helped as it is superior and the cost of customer acquisition is lower in this model. Moreover we had focused on cost efficiency. This helped us declare our maiden dividend. There are very few companies who had entered dividend list even though they had started business in early 2000 itself”.
Although it will continue to ride primarily on the bancassurance model, this life insurer sees its alternate channels increase its contributions to overall revenue. However, according to Mathur, the company has no plans to focus on growing a full-blown agency channel.
Published on
June 19, 2022