Indian mkt is under penetrated; demand for insurance will remain high

Written by Kavitha Venkatraman | Updated: Oct 31 2009, 04:38am hrs
Aegon Religare Life Insurance, which launched its pan-India multi-channel operations in July, 2008, with over 30 branches, is planning to grow its network to 150 branches in the next three years. Last week, the promoters infused fresh capital worth Rs 70 crore into the company taking the total base to Rs 465 crore. In an interview with FE's Kavitha Venkatraman, the company's CEO Rajiv Jamkhedkar talks about the road map of the company, effects of the slowdown and the product line up. Excerpts:

How has the general economic slowdown affected your targets this year When do you expect to break even

The general economic slowdown has definitely affected the performances of companies across the board. Companies, that had a sales growth of 60-70% per annum, have seen it slip to 20-30%. In that sense, when we say slowdown, it is a relative slowdown and not an absolute one. India is an under-penetrated market and so the demand for insurance will always remain in the system. Also, people realise that growth is not that easy.

We expect to break even in the eighth year of our operations. Insurance is a long-term business and we have a long-term business plan. For us, the business plan does not change fast as we have a 10-year horizon.

The concept of life insurance has not percolated to the rural areas. What would be your role in enhancing the awareness levels among that section of the population

Our communication strategy from day one has been to educate the consumer. We launched with the Kum Insurance Lene Ki Bimari (KILB) advertisement, which was not a typical corporate or product ad. It was a piece of communication that had a relevant message for the consumer and was educative in nature. This was followed by the Pension and Star Child campaign, which were product ads, but again, educative in nature. In between, we also released a few educative print ads. Our main aim is to produce communication that helps the consumer in understanding the category better.

What is your road map for the company over the next three years

Our business will be grown through a strategic mix of innovative product development, multi pronged distribution approach and strong brand building. We will focus on training, productivity and will scale up in the most profitable manner possible.

Our plan for the first year of operations was to open 52 branches across the country and we have already done that. Our plan for this current fiscal is to build distribution and increase productivity of each of the 52 branches spread across 42 cities. We will continue to grow and expand for the next two-three years. We will add about 150 branches over the next three years.

How is your product line up as of now and what kind of products do you intend to add to the basket, especially, in the situation when there are many players offering a diverse products

Aegon Religare Life Insurance has three term plans, five Ulips (including the country's cheapest Ulip offering), a child plan and a pension plan. As part of our product development strategy, we continuously conduct consumer research. At the moment we are looking at different product development initiatives in the area of health and annuity.

What is your recruitment plan for this year What is the present strength

Our employee count is 1,500 currently and keeping in mind our future growth plans, we need to infuse talent in all functions of the organisation. This fiscal, the company plans to add about 300 professionals in the company and we will recruit 1,000 more in the next financial year (2010-11).