Chennai: Two public sector banks, Canara Bank and Oriental Bank of Commerce, have joined hands with HSBC Insurance (Asia-Pacific) Holdings to float a life insurance venture in India.

The trio, which has announced plans to set up an insurance venture in March this year, also signed a formal agreement for setting up the JV.

Christened Canara HSBC Oriental Bank of Commerce Life Insurance Company Limited, the new life insurance company will have an equity base of Rs200 crore. Canara Bank will hold 51 per cent stake in the life insurance company while HSBC Insurance (Asia-Pacific) and Oriental Bank of Commerce will hold 26 per cent and 23 per cent respectively.

HSBC Insurance has contributed Rs125 crore as premium for its 26 per cent stake while Canara Bank and Oriental Bank are subscribing to the capital at par value.

Under the terms of the agreement, HSBC will provide a range of management services, which will include nominating executives for certain senior roles.

"The business model will be largely bancassurance driven. The life insurance company will leverage the extensive branch network of the three promoters and their large customer base," says Harpal S Karlcut, CEO designate of Canara HSBC Oriental Bank of Commerce Life Insurance.

Forty-two-year-old Karlcut is a hardcore insurance professional. He was earlier CEO of HSBC Life Insurance, UK and chairman, Marks & Spencer Life Insurance Company, UK.

He will be the first qualified actuary to head a private sector life insurance company in India. A mathematics graduate from Cambridge University, UK, Karlcut also has an MBA degree apart from the actuarial qualification from the Institute of Actuaries, UK. He is with the HSBC group for the past 15 years.

According to him, the proposed life insurance company will have access to over 40 million customers and a nationwide distribution network of 3,600 branches throughout India.

While both Canara Bank and Oriental Bank of Commerce offer an extensive client base, complementary distribution networks and broad local market knowledge, HSBC brings to this partnership its considerable insurance experience, product range and proven bancassurance capabilities.

Speaking about the product portfolio of the proposed life insurer, he said: "Each of our shareholders already sell life insurance products and they know the market well. We will have a good mix of traditional and unit linked products."

At a time when other domestic life insurers are known by the first two words in their name- ICICI Prudential, Bajaj Allianz, HDFC Standard and the like- it will be surely interesting how Canara HSBC Oriental Bank of Commerce Life Insurance would be know in short.
also see : General reports on Insurance
Other reports on Canara Bank
Other reports on Oriental Bank