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IndusInd Bank BSE 0.49 %, a bancassurance partner for Cholamandalam BSE -1.46 % General Insurance and Religare Health Insurance, plans to start its own general insurance firm, said two people close to the development. The bank, led by Romesh Sobti, plans to make general insurance products and not just be a distributor.
“We are evaluating setting up a general insurance company," said a senior executive with IndusInd Bank. “It is in the initial stages and the board has not yet passed a proposal to set up a general insurance company.” IndusInd Bank did not respond to an email seeking a response on the same. The insurance business is generating a bulk of fee income for banks. The insurance regulator allows a bank to sell insurance policies of three life insurance, three general and three health insurance companies.
Many private and public sector banks are looking to open up their own distribution networks to sell products of multiple insurance companies. The Rs 1.25-lakh- crore general insurance industry has got a boost from the recently-announced crop insurance scheme of the government. Also, the general insurance industry is relatively less cash intensive than the life insurance industry. Companies in this sector turn profitable in five to seven years.
Acko and Oben General Insurance (in which Fairfax has a stake) are among the applications filed with the Irda to set up general insurance companies. There are three other applications – filed by Dewan Housing Finance BSE 0.84 % Limited, Edelweiss BSE 3.58 % and Aspire Health Insurance.
