Bharti AXA plans on expanding its wings in the fast growing life insurance market

Bharti AXA plans on expanding its wings in the fast growing life insurance market. It has forecasted a 5 percent market share holding by the end of 2012. One of the primary reasons for this aggressive expansion strategy of the company is the huge potential and largely untapped insurance market.

India is the fifth largest life insurance market in the emerging insurance economies globally and is growing at 32-34% annually. This impressive growth in the market has been driven by liberalization, with new player’s significantly enhancing product awareness and promoting consumer education and information.

Total life insurance premium in India is projected to grow Rs 1,230,000 Crore by 2010-11. The current market is worth 50,000 crores. Bharti AXA Life insurance, which is a joint venture company between India's leading conglomerate, the Bharti Group and France-based financial protection and wealth management service provider-AXA, has currently a modest share of 1 percent in the market.

Bharti-Axa’s key strategy is to leverage on the wide reach of Bharti Operations by aligning with Bharti Airtel distribution points, corporate agents and brokers.Bharti Axa has set-up virtual branches to distribute policies using the retail and telecom outlets of the Bharti Group. Bharti-Axa envisions virtual branches as a key strategy and has currently 25 percent revenues from the same.

Chief actuary at Bharti AXA GLN Sarma says. “Capital constraints have prevented us from being overly aggressive. We would like to retain what we have and consolidate our position.” The company is also not planning any big advertising campaigns and instead, has chosen to communicate with customers through phone calls, text messages and emails. Sarma agrees that product distribution and building channels has been a problem for Bharti AXA because the company does not have a parent bank to fall back on. “Also, many banks have turned into insurance product manufacturers from mere insurance distributors. This makes them our competitors ruling out the possibility of a distribution deal with them,” he says.

However, despite the capital constraints, Bharti-Axa is all set to infuse another 100 Crore in the fourth quarter. Apart from this, the company is on an aggressive hiring spree with its plans to beef up the sales force to 45,000 from the present 30,000.

The current product portfolio of Bharti-Axa is that of eight life insurance products. This includes six ULIP products. The company’s CFO, V Srinivasan, commented that Bharti-Axa’s key strategy would be to focus strongly on ULIP products.