Metlife wants more bancassurance JVs

MUMBAI: Metlife India, an affiliate of America’s largest life insurer Metlife, is changing its approach to distribution. The company, has decided to acquire more bancassurance partnerships to increase marketshare. Promoters have assigned more capital to the insurance JV. Speaking to ET, Rajesh Relan, MD, Metlife India Insurance, said, “We do not like being in the 12th position. We plan to take Metlife India to the next level by making our deal with UTI Bank work.”

Metlife has entered into a tie-up with UTI Bank — a partnership for which there was a hot contest from all insurance companies, including LIC. Mr Relan took charge as MD in September. Earlier, he was the bancassurance head at Aviva India Life Insurance.

He had joined Metlife India a few months back — a change of leadership, which was watched with much interest. When it set up office in India, Metlife was committed to the agency channel, which it saw as the keystone of its business. It had also begun with a focus on traditional products.

However, rivals have increased marketshare significantly through sales of investment products and multi-channel distribution. Metlife too has changed its product strategy and generates over 65% of its sales through unit-linked sales plans. “As a service provider, Metlife can never be prescriptive in its product strategy,” said Mr Relan.

He added that while there was a need to have a balance of products in its portfolio, sales will reflect the customers choice. The promoters have committed to take its capital to Rs 530 crore from its present level of around Rs 450 crore. The capital is needed as the company is looking at a long period of growth. “

“Breakeven will be out of reach as long as new business premium surpasses renewal premium. Our growth targets are such that new business premium will continue to outstrip renewal premium for sometime,” he said.

Agents are an important part of the distribution, but they will not be the mainstay as we expect banks to contribute, said Mr Relan. Besides, its recently-concluded partnership with UTI Bank, Metlife has three other bancassurance partnerships — J&K Bank, Karnataka Bank and Dhanlakshmi Bank.