By Sudeshna Sarkar, IANS
Kathmandu : India’s National Insurance Co (NIC) has signed a three-year deal with Standard Chartered Bank to capture greater market share in Nepal.
NIC, which has been active in Nepal for over three decades and saw a 21 percent growth in business in the current fiscal, is eyeing a higher slot than its fifth position in Nepal’s non-life insurance industry with the strategic alliance that will enable the bank’s customers to buy insurance policies from bank counters.
“Marketing is the biggest problem in Nepal due to its geophysical conditions,” said J. Ghosh, NIC’s chief executive officer for Nepal.
“Our distribution channels are limited to the main urban centres. We have not been able to penetrate the remote districts, say, like Rolpa (in mid-western Nepal) since we have to keep in mind the cost-effectiveness of our marketing.
“We also have a limitation by way of infrastructure. The StanChart alliance will address that.”
While NIC has offices in the capital and five towns – Birgunj, Biratnagar, Nepalgunj, Janakpur and Hetauda – StanChart has 12 branches.
The bank also has a high reputation in Nepal as well as goodwill, Ghosh said, and its work culture matches NIC’s, the reason for choosing it as the first business ally.
In India, NIC has a tie-up with eight major banks as well as 13 regional cooperative banks that have started penetrating the villages. Now NIC hopes to put the same plan into action in Nepal.
As the icing on the partnership, NIC has come up with a new package that offers insurance for seven different categories of household goods, ranging from buildings and jewellery to computers and fridges.
The Sweet Home policy was launched keeping in mind the difficulty in selling a single product policy.
It also reduces hassles for the customer, with one premium covering a gamut of products. Also available on an optional basis is cover for riot and strike, malicious damage, sabotage and terrorism.
Currently, there are 17 non-life insurance companies in Nepal, with four more in the pipeline.
Now NIC hopes to best its Indian rival Oriental Insurance by adding a portfolio it did not have earlier – aviation.
For StanChart, the alliance brings in commission on the policies sold, an asset for any bank in Nepal where the central bank-mandated insurance rates are among the lowest in Asia, leading to a flight of capital.
It also enables the bank to offer a value-added service.
“This value-added service is expected to provide a whole gamut of financial solutions to our customers under one umbrella,” Sujit Mundal, CEO of StanChart, said.