Indian Overseas Bank Ltd (IOB) has entered into a distribution arrangement with Universal Sompo General Insurance Co Ltd, a joint venture of IOB with Allahabad bank, Karnataka Bank, Dabur Investments and Sompo Japan Insurance Inc, for distributing non-life insurance products.

IOB managing director S A Bhat and USGI Co executive chairman O N Singh signed the distribution agreement in Chennai, today. The agreement will be effective 20 December.

IOB has an equity participation of 19 per cent in the Rs235 crore equity capital of USGI Co. The Japanese company has a 26 per cent stake. Dabur is a financial partner with 10 per cent stake, Bhat said

IOB also has a tie-up with United India Insurance Co to tap the potential of captive general insurance business and for distribution of general insurance products.

The bank had a similar arrangement with National Insurance Co and Life Insurance Corporation for providing one-stop financial solution to its customers by cross-selling all types of life insurance products to its clients.

USGI Co, according to executive chairman O N Singh, has 32 products in place and is planning to launch 6-8 more products after getting necessary clearance of the Insurance Regulatory and Development Authority (IRDA).

''Instead of looking at a third party to distribute our products, we have decided to rope in our equity partners initially. Accordingly, we signed up with Allahabad Bank in November and IOB today. We will be also signing up with Karnataka Bank, our other partner, in two months' time, and thereafter, use Dabur Investments' retail channel,'' Singh said.

IOB, he said, has identified 16 branches across the country to distribute insurance products. The bank will also appoint a dedicated officer to coordinate with each of the bancassurance partners to avoid delay in collecting premiums as well as settling claims fast, Singh said.

The company has recruited 250 people and is hopeful of getting a market share of 2 per cent in two to three years, he added.