Reliance Life's Nandagopal may head JV of BoB, Andhra Bank, UK insurer

MUMBAI: P Nandagopal, managing director of Reliance Life Insurance, may move to head the three-way joint venture between Bank of Baroda, Andhra Bank and UK insurer Legal & General.

The three partners, who entered into a shareholder agreement a year ago, are actively seeking a CEO to take forward the joint venture���s registration with the insurance regulator. In terms of the shareholder agreement, BoB holds 44%, Andhra Bank 30% and Legal & General 26%. In addition to a CEO for the joint venture, Legal & General is looking for a country head for its India operations.

BoB���s life venture has already been delayed. As per the original plan, BoB-Legal & General was to begin selling policies in the first quarter of calendar year 2009. Canara Bank, HSBC and Bank of India-Dai-ichi, which signed agreements around the same time, have already started selling policies.

Although private life insurance companies are going through difficult times, the bank-sponsored joint ventures have some strategic advantages. The financial crisis has tilted scales in favour of state-owned financial institutions, which are seen to have an implicit government guarantee.

Among all the new private life insurance companies, SBI Life insurance is the only one to make profits. One reason for SBI Life to make profits where others have failed is its success in using the bank network for distribution, which in turn has helped control costs.

Mr Nandagopal is seen as well placed for the position. Although Reliance got into life by AMP Sanmar, the business was almost like a start-up and all the scaling up happened after he took charge. Secondly, before joining Reliance Life Insurance, Mr Nandagopal headed Bancassurance in Birla Sun Life.

Selling to bank customers is likely to be the cornerstone of BoB-Legal & General���s business strategy, considering that BoB and Andhra Bank have a combined branch network of over 4,000 branches. Mr Nandgopal, who began his career with New India, has the joint sector experience having worked in GIC AMC.