Digit Insurance has tied up with Karur Vysya Bank (KVB) for its first bancassurance partnership and will target the small and medium enterprises (SME) with packaged products, chairman of the private non-life insurer company Kamesh Goyal has said.
Goyal told Moneycontrol that Karur Vysya Bank was the right fit for them. “The bank is investing into the digital path by giving loans through app to SMEs. We wanted to focus on this particular segment more where the opportunities are big. If an SME wants insurance, they will be able to do it on a real-time basis,” he said.
Bancassurance is an arrangement that allows insurance products to be sold through a bank. A bank is allowed to tie up with three life, three non-life and three standalone health insurers.
In the initial stage, the insurance products for SMEs will provide a cover for business interruption and loss with a fixed benefit, beyond the regular coverage available in the market. Later, Goyal said, components like health insurance could also be added.
For small business-owners, the average assured sum would be around Rs 10 lakh and a ticket size of Rs 2,000-3,000, Goyal said.
They were aiming for a smooth purchase process and a quick settlement of claims. Under the arrangement, claims would be settled in 14 days against two to three months taken by other players, he said.
Digit Insurance’s first bancassurance tieup is part of the company’s strategy to expand customer base, with new demographics and customer segments that KVB would offer. For KVB, this is the first insurance collaboration aimed at SME segment.
The partnership would allow them to offer innovative products tailored to the needs of SMEs, Karur Vysya Bank MD & CEO PR Seshadri said.
Digit Insurance had a gross written premium of Rs 460.03 crore in the June quarter, which is a 338.83 percent year-on-year growth, Insurance Regulatory and Development Authority of India data shows.
Less than two years old, Digit Insurance, which began its business selling motor insurance, had a market share of 1.11 as of July.
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