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Bijoy Ghosh

Fee-based income: (From left) Mr O.N. Singh, Executive Chairman, Universal Sompo General Insurance Co Ltd; Mr S.A. Bhat, Chairman and Managing Director, Indian Overseas Bank, and Mr Koichi Hattori, Managing Director, Universal Sompo General Insurance Co Ltd, at the signing of MoU in Chennai on Monday. -

Our Bureau,

Chennai, Dec.8 Indian Overseas Bank expects to take a call on altering its lending rates next week.

On the sidelines of a press conference to announce IOB entering into a distribution agreement with Universal Sompo General Insurance Co, Mr S. A. Bhat, Chairman and Managing Director, IOB, said, “We will take a decision on lending rates after our asset-liability committee meeting next week. We have already cut our deposit rate.”

IOB is a minor partner in Universal Sampo, with a 19-per cent stake in the company which began its operations early this year. With the agreement signed on Mondayy, IOB will also distribute Universal Sampo’s products. Earlier, IOB was selling the products of the public sector United India Insurance.

Asked why the bank had not made much head way with United India , Mr Bhat said that they were some delays “from their side and some from ours”. Last year, IOB earned Rs 9 crore from selling insurance policies of United India and LIC. Mr Bhat sees a fall in income from this source in the current year. He expects the bank will earn Rs 6 crore from selling insurance.

Universal Sompo is capitalised at Rs 235 crore. The company is a joint venture of Allahabad Bank, IOB, Karnataka Bank, Dabur Investments and Sompo Japan Insurance and started operations in February 2008. However, the insurer started selling the products only last month. The delay was in getting due approvals for the products from the insurance regulator.

Today, it has 34 products, with seven more in the pipeline, awaiting IRDA approval. Mr O.N. Singh, Executive Chairman, Universal Sompo General Insurance, said, the newly formed insurance has a “modest target” to garner about Rs 50 crore of premium this year. He said that income from investment for insurers has significantly dipped this year with falling stock markets.

Also, after the de-tariffing (free-pricing) in January 2007, the premiums on major lines such as fire, engineering and health policies sold to companies have crashed. “Therefore our focus is largely on the retail consumer,” he said.

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