IDBI Bank, Federal Bank and Fortis have signed a Joint Venture Agreement to establish a new life insurance company. IDBI Bank will own 48% equity, while Fortis Insurance International and Federal Bank will each own 26%.
Subject to regulatory approval, the three partners expect the new company to be operational by mid-2007. It will promote a full range of life insurance and long-term savings products, including traditional and unit-linked savings plans, and health and disability cover. These will be available on an individual and group basis.
The joint venture will build a multi-channel distribution platform including bancassurance, agency and direct sales. In view of Fortis's global experience in bancassurance and the strengths of the bank partners, the company will use bancassurance as a key distribution strategy.
In July 2006, IRDA has given Bharti AXA Life Insurance Company the go-ahead to enter the life insurance business. Competition is hotting up in the life insurance segment, with the entry of more players. Life Insurance segment has great potential as 80% of the population in India is without life insurance coverage.
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