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  • 18 OCT. 2016

    We hope to achieve break-even in 3-4 years: Deepak Mittal

    Private life insurance company which was one of the first companies to get the foreign shareholder stake hiked to 49 per cent from 26 per cent is looking to achieve breakeven in the next 3-4 years. In an interview with M Saraswathy, Deepak Mittal, MD & CEO, talks about their strategy to move towards profitability. Excerpts:

    The foreign direct investment (FDI) stake hike in Edelweiss Tokio Life has been completed. Where will these funds be utilised?
    The FDI demonstrates long term commitment of our partner Tokio Marine to the business in India. We are one of the fastest growing companies in the sector and we continue to invest in the business to drive growth. The funds will be used for business expansion and fulfill our growth aspirations.

    By when do you aim to achieve break even?
    Life Insurance is a long term business and depending on business models, companies have taken anywhere from 8-10 years to break-even. Moreover, the environment in the last few years has been quite challenging with the industry seeing negative growth. Signs of recovery have been visible last year and this year continues to augur well for the industry from a growth perspective. In this challenging environment, we have been able to grow at a fast pace, but this growth has been efficient.

    Given that market environment provides tremendous opportunities for life insurance, we hope to be able to achieve break-even in the next 3-4 years. If we are able to grow ahead of our plans and more efficiently, we can achieve this milestone earlier.

    Would you be launching more products for the online segment?


    Online is an important channel for us and we will continue to invest in it. We believe that digital channels will play a key part in the future, and we continue to watch this space to capitalize on whatever opportunities present themselves. Launch of Edelweiss Tokio Life - TotalSecure+ (an online only comprehensive protection plan) is a testimony to that. We will continue to design products targeting online customers and addressing the need of this evolving segment.

    Will you be looking to tie up with more banks to distribute insurance, since the regulator has allowed banks o partner with up to three insurers each in life, non-life and health?

    Open architecture in the corporate distribution space has created interesting opportunities for insurance manufacturers. Amongst the new non bank-backed entrants in life insurance, we are the only company who has had a bancassurance partner for the last three years and we have been able to grow the business multiple times.

    On the back of our success with our existing bancassurance partner, we will look for tied-ups with other banks to be able to add value to the banks' customers by providing a comprehensive bouquet of products to meet the customer needs. We are already in discussions with a few banks in this regard.

    Health insurance is a segment where life insurers are competing aggressively with general insurers and health insurers. Will the aim be to have more products in this space?
    In addition to TotalSecure+, which provides the choice of 7 and 35 critical illnesses as an accelerated benefit; we already have one stand-alone Critical Illness product (Edelweiss Tokio Life - CritiCare+) and two riders (Critical Illness rider & Hospital Cash Benefit rider). All of these offerings are fixed benefit based. We believe this segment will continue to grow and continue to attract discerning customers. Hence, we will be launching some innovative health products in time to come.

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