Financial Daily from THE HINDU group of publications
Wednesday, May 12, 2004
Financial Daily from THE HINDU group of publications Wednesday, May 12, 2004 |
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Money & Banking
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Financial Performance Corporate Results - General Insurance Royal Sundaram posts maiden profit Our Bureau
Chennai , May 11 ROYAL Sundaram Alliance Insurance, a general insurance company, announced a profit after tax of Rs 8 crore for the financial year 2003-04, the first time the company has made a profit. The premium income for the year was Rs 262 crore, a 40 per cent increase over the previous year's premium of Rs 187 crore. The company's claims ratio (extent of premium paid out as claims) for 2003-04 was 68 per cent, a drop from the preceding year's ratio of 76 per cent. Mr Antony Jacob, Royal Sundaram's Managing Director, said globally a claims ratio of 65 per cent was considered good. He attributed the fall in claims ratio to an improvement in the company's processes. For instance, 70-80 per cent of the claims are processed by the company's own surveyors and better use of information technology has led to faster decisions. The growth in Royal Sundaram's business had also led to a fall in the ratio. "As the book becomes larger, shocks can be better absorbed," said Mr Jacob. Motor insurance made up about 50 per cent of the company's total premium income. This was followed by fire insurance (21 per cent) and personal accident (8 per cent). Mr Jacob identified insurance packages designed for small enterprises and health insurance for individuals as promising segments. In 2003-04, small enterprises generated a premium income of Rs 18 crore, and Mr Jacob felt there is an opportunity to double it. Royal Sundaram's rural and social sector businesses generated a premium of Rs 15.8 crore and covered over 60,000 lives. The company exceeded the minimum rural business obligations for general insurance companies set by the Insurance Regulatory and Development Authority.
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