IndiaFirst Life Insurance is likely to receive a six-month glide path following the exit of Union Bank of India from its corporate agency tie-up, according to sources familiar with the development. The proposed temporary extension comes at a critical juncture as the insurer's proposed stake sale to BNP Paribas Cardif faces delays due to disruption in its bancassurance distribution. Union Bank's exit from April 1 has emerged as a key trigger, creating uncertainty around near-term growth visibility and valuation.
Bancassurance remains the backbone of IndiaFirst's distribution, contributing nearly 76% of its individual new business premium, making the disruption particularly significant. The company's business model is heavily bank-led, with nearly 22,000 partner bank branches driving distribution. IndiaFirst is highly dependent on its promoter banks — Bank of Baroda and Union Bank — which together contribute over 76% of total sales. Its shareholding structure further underlines this dependence: Bank of Baroda holds 65%, Union Bank 9%, while Warburg Pincus (via Carmel Point) owns 26%.
The proposed deal with BNP Paribas Cardif, which could value IndiaFirst Life at around ₹5,000–₹5,200 crore, is now contingent on resolving the bancassurance uncertainty. As reported by sources, valuation is directly linked to the entry of a new banking partner. The six-month glide path is expected to provide continuity in policy sales while the insurer looks to onboard a new banking partner, with sources noting that if they get a 2–6 month glide path, they can exit and find their way.
The episode has reignited concerns over commission-led competition in the bancassurance model, with industry officials noting that banks tend to sell higher commission products over suitable ones. Higher commissions are increasing overall costs for insurers and impacting profitability. Last week, Finance Minister Nirmala Sitharaman said a government-appointed banking committee will examine whether an 'open architecture' model should be adopted for distributing insurance and other financial products, which would allow banks to partner with multiple insurers.
