By any measure India is a huge market. For Ageas it is also a market with enormous potential for future growth. By 2030, India is forecast to be in the top 3 economies of the world. The Life insurance market, with penetration rates only just above 3%, is forecasted to grow 14-15% in premium volumes in the coming years. Holding even a modest share of this growth makes great sense.
These were some of the driving factors in the decision by Ageas to increase its interest in Ageas Federal Life Insurance Company Ltd. (AFLIC), which it currently operates together with Federal Bank, to 74%, and made possible by a relaxation in regulation around foreign investment. This transaction is a second step up for Ageas after the increase of its stake from 26% to 49% in 2020. As a result of this shareholding restructuring, AFLIC is now a controlled and consolidated entity within Ageas.
This investment also aligns with Ageas’s strategy to expand in regions in which it is already present and in promising markets with a low insurance penetration and high potential for growth. India ticks every box.
The right place… and also the right time
To boost penetration level, the Indian insurance regulator IRDAI has been implementing or proposing a range of new regulations. Among others this includes regulations which reduces time to launch products, an increase in the maximum number of tie-ups for intermediaries, the use of innovative technologies and alternative capital sources to fund the business. All these changes provide AFLIC with great opportunities to tap into new areas for future growth.
A new strategic growth agenda
The aim is to take AFLIC to a top 10 position in the coming years. The priorities include:
1. Diversifying the distribution channels
As well as our distribution partnership with IDBI Bank, Ageas will explore new distribution partnerships in the market. And with Federal Bank, Ageas will move to a true omni-channel bancassurance business model. AFLIC is creating a new digital sales channel, leveraging on to the Group’s partnership with eBaoTech. The first fully digital and embedded insurance solution was launched in 2022 with Federal Bank.
In the agency channel we will expand the number of agents and constantly focus on the quality of our agency force, helped by the new partnerships with the Million Dollar Round Table.
2. Expanding in the protection business
The protection gap in India is one of the largest in the world, leaving the population exposed to adverse situations in life. AFLIC will continue to focus on expanding and enhancing its protection solutions for customers.