Financial Daily from THE HINDU group of publications
Wednesday, Jun 05, 2002
Money & Banking
ICICI Prudential to widen capital base by Rs 40 cr
KOLKATA, June 4
ICICI Prudential Life Insurance Company Ltd has decided to increase its capital base of Rs 190 crore by another Rs 40 crore within the next two months.
According to Mr Saugata Gupta, Chief of Marketing of ICICI Prudential, the company had also decided to use other channels of marketing to maintain its leadership in the private life insurance sector.
"During the current financial year we will increase our office network. Currently, we are present in 19 cities and we will increase it to 25 cities. Moreover, we will continue to increase the network of our agents,'' Mr Gupta told Business Line.
During the financial year 2001-02, the company registered a premium income of Rs 122 crore on a sum assured of Rs 2,700 crore. The company sold a little over one lakh policies. According to Mr Gupta, ICICI Prudential had 39-40 per cent share of the total business generated by private sector life insurance companies.
He refused to talk about the targets for 2002-03 because it might lead to breach of the listing norms of New York Stock Exchange. (ICICI's ADRs are listed on that bourse.)
It may be noted that all insurance companies are increasing their capital base because of two reasons, namely, to expand their operations and reach out to as many potential customer as possible; and secondly, to meet the stringent solvency requirements as their business expands. At present, ICICI Prudential has more than 11,000 agents and is adding about 500 agents every month. Regarding marketing channels, Mr Gupta said that the company was looking at "corporate relationships'' and bancassurance.
ICICI Prudential will try to leverage its parent, ICICI's existing relationship with the corporate houses. "A lot of corporate entities carry out all their financial transactions exclusively with ICICI. We would like to extend those relationships to insurance also. So we will be exploring the possibility of group insurance with these corporate houses,'' he said.
Mr Gupta felt that bancassurance also held tremendous potential for the marketing of its products. Already the company has signed memorandum of understanding with Federal Bank, Bank of India and South Indian Bank, apart from its parent, ICICI Bank.
ICICI Prudential is also holding talks with the Kolkata-based Allahabad Bank. However, Mr Gupta said that an agreement was yet to be signed.
Apart from these two channels, the company was looking forward to corporate agency and brokers, a sector, which will open up once the insurance amendment Bill is passed by the Rajya Sabha.
The company is taking the help of different non-governmental organisations to meet the mandatory business obligations in the social and rural sectors. In the last financial year it sold a number of its products in the rural belts of Maharashtra, Tamil Nadu and in the tea gardens of the North-Eastern States.
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