Ageas Federal Life Insurance, a 70:30 joint venture between Ageas and Federal Bank, on Tuesday unveiled a new brand identity to reflect its next phase of growth. MD & CEO Jude Gomes tells Narayanan V on what prompted the rebranding exercise, the private life insurer’s growth plans, and the possibility of entering the health insurance space. Edited excerpts:
What prompted the rebranding?
In the last 17 years, we actually had two brand changes (Fortis Insurance to IDBI Federal; IDBI Federal to Ageas Federal). Both were accentuated by ownership change. This is the first time this brand change or repositioning is driven by a purpose. This brand repositioning is a shift in terms of our purpose and strategy to deepen our emotional connect with Bharat and not just India. We are looking to go deeper into tier-2 and tier-3 cities and we will work on simplifying insurance for the masses. Our distribution was largely skewed towards the bancassurance. We didn’t need that much branding because we had exclusive partners (IDBI Bank and Federal Bank) and we were catering to their requirements. Our strategy now is to enhance our distribution capabilities. We have 70 centers today, and we will be nearly doubling the branch network in the next one year to reach out to the last mile.
Gomes on new distribution strategy
What will be your new distribution strategy?
Over the last few months, we have onboarded large distribution partners like Jio Credit, Vakrangee, Muthoot Microfin, and Catholic Syrian Bank. Currently, 75% of our distribution is skewed towards bancassurance with one partner (Federal Bank). We are now broad-basing both our bancassurance as well as other distribution channels. Our agency channel contributes 7–8%, while DST (Direct Sales Team) contributes about 12%. We want to enhance our agency channel contribution to 25% over the next three years. So, there will be a lot of focus on the proprietary channel. There will also be a lot of focus on digital channels, both our direct-to-consumer channel as well as through web aggregator platforms like PolicyBazaar.
Gomes on GST rate cut
Has the GST rate cut increased demand for life insurance products?
Because of the current market condition, Unit Linked Insurance Plans (ULIPs) have gained a lot of traction while traditional (non-participating) products took a backseat. However, we are seeing renewed interest in traditional products (like term insurance) post GST rate cut. We are also ensuring that our riders are sold so customers going in for savings or protection policies get added protection value. That said, there is a strategic shift from mutual funds to ULIPs or other market-related products due to better returns. We feel non-traditional products will be 50–55% of the overall product mix and ULIPs hover around 45–50% within non-traditional products.
What is your full year growth outlook?
Our annualised premium equivalent (APE) on individual premium grew by 17% between April and November against industry growth of 12%. Our AUM grew by about 10% in the last nine months to ₹20,000 crore. We are seeing a lot of inflows. We have consciously moved away from writing single-premium business towards regular-premium businesses. So, our new business premiums may not appear as strong as APE because, in the life insurance industry, it’s all about writing long-term business. Our aspiration is to triple the business in the next three years.
Will you get into health insurance when composite licensing kicks in?
We are very, very optimistic about the Insurance Amendment Bill, which will focus on composite licensing, open architecture for agents, FDI limit enhancement, among other things. We are optimistic about the opportunities in a composite space. Ageas has global expertise in life, non-life, as well as in reinsurance. So, this is a space which is very interesting for us, and we will be keenly pursuing that.