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Andhra Bank and Bank of Baroda: together for Life (insurance)?
Presently a corporate agent of LIC, the public sector lender has now formed a joint venture with UK-based Legal and General Plc Insurance Co and public sector Bank of Baroda (BoB) for the launch of its new life insurance products. In a report in the Business Standard, Andhra Bank Chairman and Managing Director RS Reddy said, “The joint venture is going through formalities. We expect some products to be ready in the first quarter of the next financial year.”
The venture will focus on creating new products mainly for the rural markets. “Legal has a long product range,” he said, adding both Andhra Bank and Bank of Baroda have an experience in bancassurance and an established network in rural markets.
Instead of targeting new customers, the effort would be to reach out to Andhra Bank’s and BoB’s combined customer base of about 40 million. Andhra Bank has an estimated 17.5 million customers. “We will focus on building our own customer base by first targeting the rural markets. The life insurance products will be sold through our over 1,500 branches,” he said.
The existing 400 customer relationship managers for LIC would work for the venture. “We are preparing the business model. The product model will come up in phases,” said Reddy.
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