ECGC to increase commission rates for bancassurance

Chennai: In order to ward of competition and attract more business from the banking channel, credit insurer Export Credit Guarantee Corporation of India Limited (ECGC) has decided to hike commissions to its bancassurance partners.

"We have increased the commission rate to 10 per cent from 3 per cent," says chairman and managing director A V Muralidharan. Compared to the business procurement cost of non-life insurers (agent''s commission, brokerage to brokers) ECGC''s cost is lower even after the recent hike.

According to Muralidharan, further hikes if warranted would be made in a gradual manner. "We don''t want to increase our business procurement costs all of a sudden." Presently the company has 17 bancassurance partners and more deals are expected in the future.

Speaking about other marketing channels like brokers and agents, he says, "We are enlisting the services of broking firms. We are also taking up with the Insurance Regulatory and Development Authority (IRDA) to permit agents of non life insurers to market our policies as ours is a specialised institution." It may be recalled, IRDA has permitted Star Health and Allied Insurance Company Limited enlist the services of other non life insurer''s agents on the ground that it is a specialised institution selling only health insurance policies.

According to Muralidharan, the company hopes to achieve a premium income of Rs750 crore this fiscal. Last year the company closed its books with a premium income of Rs618 crore.