Big chunk of insurance game may now change

MUMBAI: At least three insurance companies — Star Union Daiichi, Canara HSBC OBC Life Insurance and India First Life Insurance — could witness a change in their ownership structure because of the bank mergers, but that may probably give these firms a better reach to build their businesses with extended branch network.There are three joint venture companies which are owned by banks where ten banks are being consolidated under four entities. Since there would be overlap and regulatory issues, these have to be realigned.Union Bank of India, which is merging with Andhra Bank, has a life insurance venture with Bank of India and Japan’s Daiichi. But Andhra has a stake in IndiaFirst Life, which it may have to exit. 70919318 “With this merger, 3,000 branches will get added and this will give more opportunities for the life insurance company,” said Girish Kulkarni, MD and CEO, Star Union Daiichi Life Insurance. Bancassurance is the most valued distribution channel for insurance companies due to the low cost involved.Finance minister Nirmala Sitharaman on Friday announced a big bang merger of banks that would help the nation achieve its ambitious goal of becoming a $5-trillion economy. But as these mergers happen, some of the units may have to be sold to avoid overlap and for competition reasons.Canara Bank’s merger with Syndicate Bank could come up with some challenges. Canara has a joint venture in life insurance with HSBC and Oriental Bank of Commerce. While Syndicate Bank sells products of Bajaj Allianz, the branches of merged entity would also sell Canara HSBC joint venture products.

from Economic Times https://ift.tt/2MJ24gF