Corporation Bank of India, a Karnataka-based, government-owned bank, and United India Insurance Company Limited (UIIC), a Chennai-based general insurance company, recently signed a memorandum of understanding to “create awareness and to market and distribute microinsurance products through business correspondents engaged by the bank.” Corporation Bank intends to market and distribute these microinsurance products through its approximately 1,300 branchless banking terminals, designed especially for the poor in both rural and urban areas. The companies will also use “smart card” technology to offer UIIC’s non-life microinsurance products and health insurance products [1]. UIIC’s non-life insurance offerings currently include fire, motor, marine, industrial, liability, accident and travel insurance [2].
The agreement corresponds to a trend among Indian microloan, microsavings and microinsurance service providers adapting their offers to reflect customer needs. Indian microfinance institutions (MFIs) such as Spandana Sphoorthy Financial Limited are now offering monthly, instead of weekly, repayment schedules [3]. Allianz, a global financial services company focused on insurance, recently announced it would re-calibrate its global microinsurance offerings based on a popular savings-linked microinsurance scheme in India [4].
By Lindsey Shaughnessy, Research Associate
About Corporation Bank: Founded in 1906 in Karnataka state, Corporation Bank is a public corporation now majority-owned by the government of India. Corporation Bank has about 3,500 service outlets across India, and its offerings include savings, loans and credit cards. As of June 30, 2010, Corporation Bank reports a net worth of INR 61 billion (the equivalent of USD 1.32 billion), an annualized return on equity of 21.9 percent and an annualized return on assets of 1.25 percent.
About United India Insurance Company Limited: United India Insurance Company Limited, a Chennai-based general insurance company, was incorporated in 1938 but nationalized and merged with 22 other insurance companies in 1972. Today, UIIC has 18,300 employees working in 1,340 Indian offices to insure approximately 10 million policyholders. As of June 30, 2010, UIIC reports INR 7.72 billion (the equivalent of USD 165 million) in assets.
About Allianz SE: Allianz is a global financial services company focused on insurance and based in Germany. Allianz provides insurance, asset management and banking services to approximately 75 million clients in 70 countries. As of year-end 2009, Allianz reported total assets of EUR 584 billion (the equivalent of USD 742 billion).
About Spandana Sphoorty Financial Limited: Spandana Sphoorty Financial Limited provides microcredit and credit-plus services to low-income households in India. The Company was founded by Padmaja Reddy in 1998 and receives its funding from development financial institutions and banks. Spandana Sphoorty reported total assets of INR 26.8 billion (USD 580 million) as of March 31, 2010.
Sources and Additional Resources:
[1] The Hindu Business Line, “Corporation Bank, United India team up”, September 1, 2010. http://www.thehindubusinessline.com/2010/09/02/stories/2010090253320600.htm
[2] United India Insurance Company Limited, “Products”, 2010. http://www.uiic.co.in/products.jsp
[3] MICROCAPITAL BRIEF: “Indian Microfinance Institutions Shifting to Monthly Loan Repayment Schedule”, September 3, 2010. https://www.microcapital.org/microcapital-brief-indian-microfinance-institutions-shifting-to-monthly-loan-repayment-schedule/
[4] MICROCAPITAL BRIEF: “Allianz Plans to Offer Savings-Linked Microinsurance Scheme in Indonesia, World Markets”, August 26, 2010. https://www.microcapital.org/microcapital-brief-allianz-plans-to-offer-savings-linked-microinsurance-scheme-in-indonesia-world-markets/
MicroCapital’s Microfinance Universe profile: Corporation Bank
MicroCapital’s Microfinance Universe profile: United India Insurance Company Limited
MicroCapital’s Microfinance Universe profile: Allianz
MicroCapital’s Microfinance Universe profile: Spandana Sphoorty Financial Limited
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