Mumbai, Aug. 18: HSBC plans to enter new businesses to expand its presence in India. On the anvil are insurance broking ventures and a foray into pension funds once the sector is liberalised.
Niall S. K. Booker, CEO and country head for HSBC in India, today said the group has obtained a licence for insurance broking. HSBC Insurance Brokers (India), the broking arm, will operate as a composite insurance broking company.
The licence, obtained from the Insurance Regulatory and Development Authority (IRDA), also allows HSBC Insurance Brokers (India) to offer re-insurance broking services.
Insurance underwriting is an area which the group would consider in the coming months, Booker said. The bank already provides mortgages and credit-card services. However, consumer finance would be another area of interest for the company, he added.
HSBC is seeing good growth in the retail credit segment, particularly in the housing finance portfolio. “We would now look into small and medium-sized business sectors as well,” Booker said.
On the insurance broking venture, Arup Mazumdar, CEO of HSBC Insurance Brokers (India), said the minimum capital required would be Rs 250 lakh. Of this, Rs 65 lakh has been chipped in by the broking arm and the rest will be widely held by Indian shareholders, which includes HSBC’s associates, individuals and companies across various industries.
This is being done in line with the IRDA guidelines which stipulate that foreign companies can hold 26 per cent in an insurance venture.
HSBC will perform an advisory role whereby it will review a customer’s insurance needs and customise the programme to suit his needs.
He pointed out that huge opportunity existed in India as the per capita premium was only $11. The group would establish its insurance broking business in synergy with the bank in India by tapping its huge customer base.
The idea is to provide a broking service of international standards and serve the needs of customers across all lines of business. Mazumdar said the insurance broking outfit would offer companies, both local and international, partnership firms and financial institutions innovative and pro-active solutions to meet their risk management, insurance and employee-benefit needs.
This will be delivered through the group’s skills and expertise and its relations with the global insurance market.
Some of the areas in which the company has insurance broking capabilities are accident & health, cargo, credit, estates, aviation, energy, financial institution, marine, schools, corporate finance among others.