Dabur CGU bets on bancassurance

By K. T. Jagannathan

CHENNAI, NOV. 12. Re-entering a liberalised Indian territory in alliance with the Mumbai-based Dabur group, the British insurance group CGNU is seeking to approach the life business in the sub- continent differently by laying much store by differentiation through product innovation, adopting multiple distribution channels and establishing asset management company (AMC).

Clearly expressing `disappointment' over the conservative approach adopted by new players who had entered the Indian life insurance segment, Mr. Stuart Purdy, Chief Executive of Dabur CGU Life Insurance, told journalists assembled at a company-organised insurance seminar in Goa last week that ``In India we clearly have an opportunity to come out with a modernised product offering.''

Mr. Purdy reckoned that differentiation could be the password for Dabur CGU Life Insurance's success in the Indian context. Notwithstanding his dismay over the current product offerings from the recent entrants to the life business, he felt that the setting was tailor-made for accelerated product innovation. Surely, he expected every one to have a diversified distribution channel, not just relying on the conventional agent route.

He expected the company's agency force to reach around 500 by next year. Yet, he had made it clear that bancassurance could be the fulcrum around which Dabur CGU Life Insurance's business would revolve. Its tie up with Canara Bank, Lakshmi Vilas Bank and ABN Amro Bank surely gives a clue or two to its gameplan. The U.K. group, it is to be noted, has expertise in bancassurance. Promising to keep the joint venture life insurance company a largely `devolved set-up', Mr. Purdy noted that Dabur CGU had also established a training academy for its personnel. The objective was to set high service standards. ``We want to build the Indian business with Indian expertise. We don't intend to replicate what we have elsewhere but rather adapt and develop newer products to suit local needs,'' Mr. Purdy said.

He expected the venture to break even in seven years. And, he was confident that both partners would bring in as much money into the venture as the business success dictated.

The chief executive expected the company to roll out its products within a couple of months. The AMC that the CGNU was planning would come only after the product launch by the joint venture company. The AMC, in his view, could be in position in four months from hence. The U.K. company, it was indicated, would hold 75 per cent stake in the AMC. The balance would be held by the Indian partner Dabur. In Asia, the trading name of CGNU Plc. is CGU. The proposed AMC would strive to build its own portfolio. Why an AMC? At least Mr. Purdy saw quite a synergy between life insurance and asset management businesses. After all, the management of long-term funds was indeed a crucial constituent of life insurance. The tie-up with the banks for selling the insurance products could come in handy for the proposed AMC to hawk its units as well.

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