Union Bank to tie up with New India Assurance

Atmadip Ray

Mumbai, Jan 4: The Mumbai-based Union Bank of India (UBI) has decided to enter into an alliance with the state-run general insurance giant, New India Assurance for distributing non-life insurance products to its retail customers.

The board of directors of the bank will meet on January 5 to approve the decision. Under the arrangement, Union Bank would act as corporate agent of New India Assurance.

The alliance would herald another landmark in cooperation between the two financial entities to leverage their respective strengths. Earlier, Union Bank had tied up with HDFC Standard Life to distribute its life-insurance products and pension products through its wide network of branches across the country.

UBI has identified 20 branches in Mumbai for retailing insurance products. It has a strong presence in the western and northern regions of the country. Around 60 per cent of its branches are rural and semi-urban, sources pointed out. UBI has also inked an alliance with the United India Insurance for providing insurance cover along with its home loans.

After the Reserve Bank of India (RBI) allowed banks to enter into the insurance market, many banks opted the indirect route of strategic alliance to provide insurance products to their customers.

These tie ups would also help enhancing bank’s fee-based income. With this arrangements, UBI would be in a position to offer a gamut of services to woo retail customers. In the long term, there are also plans to structure insurance products that would be wrapped around the bank’s products thus offering a composite service to their customer.

During the second quarter of the current fiscal, the bank reported a net profit Rs 37.32 crore, as compared to Rs 34.12 crore during the corresponding period of the last fiscal. During the first half, the bank reported a net profit of Rs 100.35 crore (Rs 74.63 crore). Total income during the first half grew to Rs 2,183.79 crore (Rs 1,918.84 crore) while total expenditure stood at Rs 1,870.94 crore (Rs 1,671.91 crore).