We chose India due to its huge potential

IndiaFirst Life insurance,a joint venture of Bank of Baroda,Andhra Bank and UKs Legal amp; General Group of,is the latest entrant to the countrys life insurance space.

IndiaFirst Life insurance,a joint venture of Bank of Baroda,Andhra Bank and UKs Legal amp; General Group of,is the latest entrant to the countrys life insurance space. Suneeti Ahuja Kohli caught up with the companys top executives Legal and Generals group chief executive Tim Breedon and group international director Gareth Hoskin and IndiaFirst Life Insurance CEO P Nandagopal to find out why the UK-based group chose India and the challenges and opportunities that the domestic market offers.

You are present in US and Europe and this is the first venture in Asia. Why did you choose India? Did China not seem a more appropriate market?

Tim Breedon: We screened a range of countries before coming to India. Some may look attractive now and some may look attractive in the future but India was attractive then and now. We were looking for large markets with huge potential. We were looking at potential in terms of client base and then an effective bancassurance distribution network. It is very important for us to find partners that think in the same way as we do.

Gareth Hoskin: When we first looked at India ,Chinese banks were not allowed to form joint ventures with life insurance companies. But this has changed now and therefore,we might look at China going forward. China could be an interesting market for us in the future.

We do not have an open architecture in India. Do you think this will in some way hinder your growth?

P Nandagopal: I think it is not about how many relationships we have but how productive are our existing relationships that matters most. Looking at our partner banks,Andhra Bank and Bank of Baroda,together they have a customer base of more than 50 million customers and a branch network of 4,500 branch network. So this makes for the biggest network in the industry. Therefore,I do not think we are losing out on something. The opportunity to adequately leverage this is itself a huge challenge. It will really take years to complete.

Tim Breedon: We can build a very big business with just this network that has been put together.

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What are your expansion plans and how soon do you expect to break even?

P Nandagopal: We are just four-and-a-half-month old company and business plans are emerging. As far as breaking even is concerned,life insurance is a capital intensive company and takes longer time to break even. The breakeven period essentially depends upon the kind of products you sell and on the distribution model. Some models are more capital intensive and some products are more capital intensive. As far as we are concerned,we are looking at a very capital efficient product range and distribution model.