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Aviva gears up for a BPO overdrive

Bentota (Colombo), July 29: Aviva Life Insurance is planning a fresh capital infusion of about Rs 45 crore in January and intends to set up another business process outsourcing (BPO) entity — this time for its life insurance operations. The company is currently capitalised at Rs 155 crore.

Last month, Aviva set up call centres in Noida and Bangalore to process claims relating to its general insurance portfolio. The move, which was announced in February, had sent a frission of fear through Britain as the insurer joined other companies like Prudential and HSBC in shifting call centre jobs to India.

Aviva has already indicated that it plans to develop a claims-processing operation for its UK general insurance business in India.

Aviva is betting big on its life insurance operations and says bancassurance — the banking channels through which insurance companies flog their products — will contribute 13 per cent of the total premium generation in the country over the next five years from current levels of 5 per cent.

Aviva Life Insurance prides itself on being the leaders in bancassurance in the UK, Singapore, France, Italy, and New Zealand, and hopes to do an encore in India.

Traditionally, an insurance company generates 95 per cent of its business volumes through its agents and the remaining 5 per cent through bancassurance and other distribution channels.

“In the next five years, we expect the entire industry to generate 13 per cent of their total business through this channel,” said Rajesh Relan, associate director, bancassurance, Aviva Life while addressing the third Aviva-sponsored insurance summit that began in the Sri Lankan capital today.

At present, Aviva has bancassurance tie-ups with Canara Bank, Lakshmi Vilas Bank, American Express and ABN Amro.

“We are looking out for more bancassurance partners and are talking to some. We are not against public sector banks, but we will probably tie up with private banks,” said Stuart Purdy, managing director, Aviva Life Insurance India.

Asked what the future held for tied agency or exclusive arrangements if the open market policy ruled out the “one bank per insurance company arrangement”, Purdy indicated that it would be in the interests of the banks themselves to form a healthy relationship with one insurer rather than tying up with many.

Statistics reveal that today only 8 per cent of the insurable population has a cover. “Studies and demographics reveal that approximately 240-650 million people in India are expected to be insured by 2005,” Relan said.

Charles Anderson, managing director of Aviva Financial Services, Asia, said both India and China had the potential to throw up the most competitive life insurance companies in the world as they account for almost 40 per cent of the world population.

Anderson said the main drivers of growth for Asia were the favourable tax regime that encouraged investments in life insurance, tax rebates on premium paid and policy proceeds, and the slew of concessions for medical and education plans.

He said the deregulation of the insurance industry had led to a sharp increase in the number of foreign insurance players.

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