The Reliance Life Insurance Company, a unit of the Anil Ambani-led Reliance Capital, is in talks with several public and private sector banks to utilise their services in offering insurance products, a senior official has said.
"We are in talks with several banks, including public sector banks for bancassurance," said Malay Ghosh, president and executive director of Reliance Life Insurance.
Ghosh said bancassurance was a big distribution gap for Reliance Life Insurance Company and tie-up with banks was necessary for boosting the business.
"Being a late entrant in the business, we have very limited option of choosing a bank partner, because most of them are either having an insurance unit themselves or have already entered into tie-up with other firms," Ghosh told IANS in an interview here.
Bancassurance refers to banks acting as corporate agents for insurance companies to distribute insurance products, which include life as well as non-life insurance products.
Ghosh said Reliance Life Insurance was pushing for changes in regulation to allow banks to have more than one partner for selling insurance products.
Under the current Insurance Regulatory and Development Authority (IRDA) regulations, one bank can tie-up with only one insurance company for bancassurance.
Major lenders like State Bank of India (SBI) and ICICI Bank have their own insurance unit. Those who don't have insurance units have already tied up with insurance firms long before Reliance set up its insurance unit.
Bancassurance has been allowed in India since 2002 following an amendment to the Insurance Regulatory and Development Authority (IRDA) Act. Most of the lenders entered into partnership with insurance firms soon after. Reliance started its insurance business in 2006.
Ghosh said Reliance Life Insurance was in talk with several banks and as soon as regulation allowed it would enter into the partnership. "We are looking for a long-term partnership and might offer a small equity stake say up to five percent to banks," he said.
The business of Reliance Life Insurance, which has over Rs.18,700 crore assets under management, is largely driven by agents working on commission basis.
At the end of the last financial year, the company had 150,000 agents, also called insurance advisors. It also has 35 corporate agents and 72 brokers. Over 60 percent of the company's insurance policy is sold through agents.