Aviva to infuse additional capital for expansion
Private life insurer, Aviva India will infuse additional capital next year to fund its expansion plans, which will include setting up of 91 additional branches in the subcontinent nation.
By PTI |
CAIRO: Private life insurer, Aviva India will infuse additional capital next year to fund its expansion plans, which will include setting up of 91 additional branches in the subcontinent nation.
"Shareholders have agreed to pump in additional capital next year," Aviva Life Insurance India MD Bert Paterson said at a workshop on insurance here.
He, however, refused to specify the amount of capital to be infused in the joint venture between Britain's largest life insurer, Aviva Plc and Dabur.
So far, the two partners have invested Rs 559 crore of capital into the joint venture, with Rs 239 crore coming in earlier this year.
Pointing out that the insurance industry's wants the Government to raise FDI cap in the sector to 49 per cent from the current 26 per cent, Paterson said it would increase the foreign investment in the industry to Rs 2,937 crore if the overseas partner buys shares of Indian player and to Rs 4,296 crore if it bring additional capital from the current level of Rs 1,523 crore.
Aviva India is planning to add 91 branches taking the total number to 192, and recruit 6,000 direct agents to raise their strength to 12,867.
The expansion plan would be funded all through capital infusion and the company would not raise any debt for the purpose, he said.
While 23 branches would be opened in the north, east and west each, 22 branches would be opened in south, he said. Currently, Aviva is present in 398 locations in India.
Aviva India, which has already surpassed its internal business target for this fiscal, expects to more than double its annualized premium equivalent (APE) from the last year's Rs 313 crore, its marketing director Vivek Khanna said adding, APE is a slightly different concept from first premium income in the sense that it only takes into consideration 10 per cent of single premium income.
The company has already collected Rs 516 crore of APE in the first nine months of 2006.
Paterson also announced tie-ups with four cooperative banks and two regional banks to increase bank assurance agreements to 29 banks with a customer base of 43.5 million people.
Aviva Plc, which is into both life and general insurance sectors in Britain, does not have any immediate plans to enter into general insurance in India, Paterson said.
While Aviva India MD said the company would fully comply with anti-money laundering guidelines issues by insurance regulator IRDA, he sought amendment in the guidelines to make it conducive to the development of insurance sector. He, particularly, wanted changes in "Know Your Customer" norms in the rural sector.
Aviva is the seventh largest private life insurers in India with 5.7 per cent market share.
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