Signing of Mou between Allahabad Bank and Life Insurance Corporation Of India

Life Insurance Corporation of India a giant financial service sector and Allahabad Bank, which recently came out with spectacular financial results showing 179% jump in its net profit for the year 2003-04, has today entered into a strategic tie up to develop bancassurance. Shri S.B. Mathur, Chairman, LIC of India and Shri O.N. Singh, Chairman & Managing Director of Allahabad Bank signed a Memorandum of Understanding (MOU) through which Allahabad Bank will tie up with LIC of India as a Corporate Agent. This tie up is aimed at providing value added services in the form of providing Life Insurance Products to the large captive customer base of Allahabad Bank.

LIC of India with a Life Fund of approx. Rs. 3,32,000 crores and a total Assets of over Rs. 3,54,000 crores aprox. & has 2048 computerized branches spread across the country. To provide efficient and speedy service to its over 16 crores policyholders, 1905 branches are interconnected through Wide Area Network. LIC is also offering services like on-line premium payments, payments through ATM, Interactive Voice Response System (IVRS), Policy information through Kiosks and Info Centre to provide policyholders with any type of information related to policies. Life Insurance Corporation of India is aiming aggressively to marketing its products through bancassurance. LIC of India has already issued Corporate Agency Licenses to 27 Banks, which include private sector as well as co-operative banks.

Allahabad Bank which has stepped into the 140th year of its glorious existence in the Indian Banking Industry has always seized new business opportunities, which are drivers of future growth. The Bancassurance tie up with LIC of India is a major step forward in that direction which would not only meet the diverse financial needs of the Banks valued customers but also help the Bank to augment its fee-based income. The Bank has an excellent track record of registering more than 100% rise in net profit consistently for the last three consecutive years and showed a net profit of Rs.463 crores during the last financial year. Banks distribution alliance with National Insurance Company Ltd. in Non-Life Insurance segment has started providing steady stream of income

With the signing up of the Corporate Agency tie-up with LIC of India, Allahabad Bank will now be able to offer both Life and Non-Life Insurance products under one roof. Out of 1935 branches, select branches would gradually transform into virtual one-stop financial super market for the Banks more than 15 million customers. Allahabad Bank has since identified and built up a strong pool of more than 130 dedicated Officers for selling insurance products and identified 130 highly potential branches at strategic locations across the country after evaluating various aspects.

With changing customer expectation, synergizing strength of banks and insurance companies have become the order of the day as they offer multiple facilities, which the customer may leverage to fulfill his / her banking and insurance needs. Allahabad Bank by going for the Corporate Agency of LIC of India will not only be able to serve their clients better without carrying the underlying risk cost but will also be able to widen their client base. Allahabad Bank can also secure their own advances with wider and deeper insurance coverage for their customers and thus enter an important area of umbrella services, earning considerable non-fund / non-interest income in the form of agency commission and customer goodwill.