Bharti AXA Life Insurance is looking to tap the rural market to spur growth even as the conventional urban market stagnates. One of the newest entrants in the insurance sector, the company is also planning to tie up with a couple of micro-insurance agencies to launch micro-insurance products.

“The rural market is where the growth lies in the present scenario. The villages and semi-urban centres are still not affected by the slowdown,” chief actuary at Bharti AXA GLN Sarma says. “The urban markets will, at best, remain flat for some time to come.”

Bharti AXA Life is a joint venture between telecom giant Bharti and global financial protection and wealth management firm AXA. The two hold 74 per cent and 26 per cent respectively in the life insurer.

The company’s share is less than 1 per cent in a market that is heavily dominated by government-run insurance company Life Insurance Corp (LIC). Bharti AXA expects to post muted growth figures for the present fiscal year due to poor market conditions. “We are not hoping to grow very fast this year because of poor investor sentiment. Still, we should fare better than older players because our market share is much lesser,” Sarma says.

The company launched national operations in December 2006. It has 8,000 employees with 200 branches across 20 states.

“Capital constraints have prevented us from being overly aggressive. We would like to retain what we have and consolidate our position,” Sarma adds. Bharti AXA though does not plan to cut jobs because it is difficult to get well-trained people in the insurance business, he says. The company is also not planning any big advertising campaigns and instead, has chosen to communicate with customers through phone calls, text messages and emails. Sarma agrees that product distribution and building channels has been a problem for Bharti AXA because the company does not have a parent bank to fall back on. “Also, many banks have turned into insurance product manufacturers from mere insurance distributors. This makes them our competitors ruling out the possibility of a distribution deal with them,” he says. “By then, the uncertainty over who forms the next government would be out of our way. Also, the various stimulus packages would start showing effect by that time,” Sarma adds.