Mumbai, Oct 9 - With the sixth largest insurer in the world acquiring a 26-percent stake in the company, Reliance Life will get Japanese Nippon Life's expertise in areas like risk management, valuation, derivative investment and accounting norms, official said.

"This deal takes us to the next stage in risk management, customer relations, retention. Nippon will help us migrate to global norms on reporting, actuarial valuation and risk-based capital calculation after the regulator permits," said Reliance Life president Malay Ghosh.

"Japan has a predominantly traditional insurance market -- annuities, health care and group insurance. We are now focussing on traditional products or non-unit linked policies in annuities and long-term products. So there are synergies," Ghosh told IANS.

"Nippon Life commands a policy renewal ratio of 94 percent, which reflects its customer relationship practices. The company has more than 100 qualified actuaries. We hope to gain from all such expertise."

Part of the Anil Ambani-controlled Reliance Group, Reliance Capital had agreed to sell 26 percent stake in Reliance Life for $680 million to Japanese Nippon Life. With the tranaction in place, the company's valuation has gone up to $2.6 billion.

"Soon after we got the Reserve Bank's nod, we submitted our application to the insurance regulator for a final clearance. We hope for an approval in a week's time," said Ghosh about the nod from the Insurance Development and Regulatory Authority of India.

The senior Reliance official, who is also executive director of the company, ruled out any name change to reflect the change in ownership pattern and said the Japanese firm has deputed two senior executives to act as a bridge between the two companies.

"Both the companies have identified their areas of best practices and are mutually sharing them. In risk management, for example, we follow a matrix which we have shared with Nippon Life. Our senior officials exchange notes," he added.

Ghosh also said that Reliance Life will also invest in its own premises for branch/zonal offices, set up a training centre and introduce new technologies for sales teams. "For a life insurer, investment in real estate is a must."

He, however, ruled out branch expansion over the next two years from the current level of around 1,250 outlets but said talks were on with some institutions like Syndicate Bank for a bancassurance deal to mutually expand their retail reach.

Ghosh admitted that the company may fall short of its new business premium target of Rs. 3,500 crore this year, since the focus was on traditional products and within that Reliance Life intended to have an equal mix of with- and without-profit policies.

Ghosh said the company was also tightening its underwriting process, finding some early claims within two years, on the higher side in certain pockets. "Our rejection rate is only nine percent. Nearly 70 percent of the claims are from policies below two years old." (IANS)