Chennai: After a sedate existence Tata AIG Life Insurance Company Limited is expanding its distribution network in an aggressive manner. The company, which had 81 branches as on 31 March, 2007, has 169 branches three months later. And, it has chalked out plans to have 205 branches by the end of August this year.

Addressing the media in Chennai on Tuesday after launching a new whole life unit linked life insurance whole life policy (ULIP) InvestAssure Gold, the insurers chief distribution officer Joydeep K Roy told the media that the company wanted to consolidate its operations before expanding further.

The branch expansion will also lead to a 30-per cent increase in Tata AIG''s agency force of 23,400 at present. "Unlike other life insurers we follow a strict agent recruitment policy, which keeps our agency churn low," Roy said.

Tata AIG''s agency system is based on a two-tier model. The first tier agents and the second tier form the business associates or agents who are promoted to the next level based on performance. These associates also get to recruit new agents and manage them.

However, since market penetration is possible through a strong distribution network coupled with vibrant agency force, individual agents account for half the company''s total premium, with the other half coming from other distribution channels like banks, corporate agents and brokers.

The company''s average premium per policy is over Rs15,000. A substantial 55 per cent of the total premium comes from unit-linked policies, with traditional policies bringing in the rest. Therefore, the company sells a decent number of plain term assurance policies. According to Roy, the policy lapse ratio is around 14 per cent. As to the spread of business he said all the four regions contribute more or less equally.

Tata AIG is the only private life insurer to have adopted the zonal business model unlike, the centralised model followed by other companies. According to Neetasha Joshi, senior vice president and South zone business head, most of the decisions barring those relating to claims have been delegated to the zonal offices. "This in turn has resulted in faster turnaround time and increase in business."

Detailing the features of the company''s InvestAssure Gold, Roy said, the policy offers full life cover till the age of 100 years and offers flexible premium payment options. A 0.25 per cent of units under the regular premium account are also offered as assured loyalty benefits at the end of every five years. In addition the policy allows policyholders to increase the sum assured through top ups and offers a choice of five fund options.