Ageas Federal Life Insurance Announces Strategic Portfolio Rebalancing
In a significant move to bolster its market position, Ageas Federal Life Insurance (AFLI), a joint venture between Belgian insurance leader Ageas and Federal Bank, is undertaking a major rebalancing of its product portfolio. The company is placing a heightened emphasis on term insurance and annuities, areas where it currently has minimal presence. This strategic shift was unveiled by AFLI's Managing Director and CEO, Jude Gomes, during a media interaction in Kolkata on Wednesday.
Current Portfolio Composition and Future Targets
As of now, AFLI's portfolio is heavily skewed towards Unit-Linked Insurance Plans (ULIPs), which constitute 45% of its offerings. The remaining 55% comprises various conventional insurance products. Notably, term insurance accounts for only 2%-3% of the portfolio, while the company has no presence in the annuities segment. To address this imbalance, AFLI has set ambitious targets for the next three years.
Jude Gomes outlined the following goals:
- Increase term insurance to 10%-12% of the portfolio.
- Introduce and grow annuities to 10%-15% of the portfolio.
This rebalancing is part of a broader holistic strategy aimed at achieving a threefold increase in business over the next three years. The ultimate objective is to secure a position among the top 10 life insurance companies in India. Currently, Ageas Federal Life Insurance holds the 15th rank in the country's competitive life insurance sector.
Growth Metrics and Expansion Plans
Gomes highlighted the company's strong performance, noting that its individual first premium income grew by 21%, significantly outpacing the industry average of 11%. To support its growth ambitions, AFLI is planning a substantial expansion of its branch network. The company currently operates 70 branches and intends to open an additional 80 branches within the next two years.
Regionally, the Eastern zone contributes 4%-5% to AFLI's overall business. Gomes expressed optimism that this share could rise to 10% in the coming years. To facilitate this growth, the number of branches in the eastern region will be doubled over the next three years, enhancing the company's footprint and customer reach in this key market.
This strategic pivot underscores AFLI's commitment to diversifying its product mix and capitalizing on high-demand segments like term insurance and annuities, positioning itself for sustained growth and improved market standing in India's dynamic insurance landscape.
