Public sector lenders Bank of Baroda and Andhra Bank on Friday floated a life insurance company in joint venture with UK-based risk, wealth and investment firm Legal & General. Bank of Baroda has 44% stake in the company?IndiaFirst Life Insurance, while Andhra Bank and Legal & General own 30% and 26%, respectively. The new insurance firm has a capital base of Rs 330 crore.
The company planned to focus on the bancassurance model in the beginning, to leverage the existing customer base of the two banks. The firm is initially offering products for savings, education and retirement and will introduce other categories like wealth accumulation, health and group insurance plans at a later stage. The life insurance space has been growing at an average compound annual growth rate of around 20%. However, the growth in premium payment came down to 10% in 2008-09 from nearly 30% in the previous year.
Speaking at the launch of the company, finance minister Pranab Mukherjee said, ?After the deregulation of the sector in year 2000, growth of insurance sector has been boosted by the entry of private and foreign companies.? The finance minister asked the company to bring simple products to cover the rural sector. Bank of Baroda chairman and managing director (CMD), also IndiaFirst Life Insurance CMD MD Mallya said the company will take the benefit of life insurance to the masses ?especially in the rural and semi-urban areas?.
Andhra Bank CMD RS Reddy said that ?bancassurance is fast becoming a critical part of overall services platform of banks. We are confident that our partnership will help us provide world-class products.?