ING Vysya plans tie-ups to tap rural insurance
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ING Vysya plans tie-ups to tap rural insurance

Thursday, 23 January 2003, 08:00 Hrs
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NEW DELHI: ING Vysya Life Insurance Company is eyeing collaborations to tap what they consider a vast potential market in rural India where most people remain uncovered by insurance.

"The challenge is to reach out to nearly 90 percent of the Indians who are uncovered by any type of insurance. As almost 60 percent of Indians live in rural areas, we are looking at partnering with institutions and NGOs that will help us to spread awareness about insurance and reach out to the potential customers," said Yvo R. Metzelaar, managing director of ING Vysya, which also has GMR Technologies and Industries as a third partner.

A joint venture between Dutch financial major ING and southern India-based Vysya Bank, ING Vysya Life Insurance Company is among 12 private players competing for a bigger slice of the Indian market that opened to private sector participation only two years ago.

With around 25,000 policyholders paying an average premium of 9,000 per year, ING Vysya is working out new strategies to reach its target of having two million customers by 2010, Metzelaar said.

"We are looking at more banking and other types of financial institutions like cooperatives and well-entrenched NGOs to reach out to more people to make our services more attractive, efficient and affordable, particularly in the rural areas," Metzelaar told IANS here.

As Vysya Bank has more of a retail presence in southern India, particularly Karnataka and Andhra Pradesh, the insurance venture is scouting for a possible partner that would help it broaden the market reach to other regions.

A study by the Foundation of Research, Training and Education in Insurance (FORTE), a collaboration of the Federation of Indian Chambers of Commerce and Industry (FICCI) and ING Insurance, has revealed that there is tremendous potential for growth in the rural areas.

With only 11 percent of Indians covered by old age pension or provident fund schemes and the lack of any social security or medical cover for an overwhelming majority in the unorganised sectors, insurance is slowly becoming need-based instead of a tax-saving measure, the FORTE study observed.

Unlike their urban counterparts, the rural folks still have low awareness about advantages of insurance cover for both life and property, said sources in the insurance industry.

"The challenge in the rural areas is to win more trust than in urban areas. For this we need to have alliances with cooperatives, local banks and NGOs that have the local expertise and reach," said Metzelaar.

In the last two years, ING Vysya Life Insurance's main concentration has been on creating new markets in a country where a decades-old establishment like the Life Insurance Corporation (LIC) enjoyed a monopoly as the sole provider of life insurance cover.

Dictated by the market demand, ING Vysya has been gradually introducing fresh features in its product packages.

With customers having a wider choice due to privatisation, the company has been wooing the market with more affordable premium options.

"We have six products, some with money back features. We have just introduced four riders for our products giving the customer more choice in the term offer and an add-on provision for critical illnesses," said Metzelaar.

ING Vysya also sees tremendous growth potential in the pension sector. It is currently formulating pension schemes that would be launched as soon as it gets the clearance of the insurance regulatory authority and has trained personnel to roll out the products.
Source: IANS
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