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Mr Ajit Narain (right), Managing Director, IFFCO Tokio General Insurance Co Ltd, and Mr M. Gopalakrishna, Chairman, Andhra Pradesh State Financial Corporation, addressing a press conference after signing an MoU in Hyderabad on Tuesday. - A. Roy Chowdhury

Hyderabad , May 10

IN a bid to improve its other income streams for higher business volumes and profitability, the Andhra Pradesh State Financial Corporation (APSFC) has entered into an alliance with IFFCO Tokio General Insurance Company Ltd (ITGI) to become its licensed corporate agent for selling non-life insurance products.

The ITGI Managing Director and CEO, Mr Ajit Narain, and the APSFC Managing Director, Mr Ajay Kallam, have signed a memorandum of understanding to this effect here on Tuesday.

Addressing the media, the APSFC Chairman, Mr M. Gopalakrishna, said the MoU provides a blue print for the common efforts of the two organisations to provide high quality insurance services to the small and medium enterprises (SME) in the State.

Stating that the Corporation on an average extends loans of Rs 350 crore per annum to the SME segment, the APSFC Chairman said if all those borrowers obtain insurance cover from it, then the Corporation could record a premium income in the range of Rs 3 crore per year.

However, since the borrowers were not bound to take the insurance cover only from the lender, there was no guarantee that all such insurance premium would come to APSFC.

He said APSFC would, however, not lend to those SMEs that did not get their assets insured.

Having recorded an insurance premium of Rs 507 crore for the fiscal ended March 2005, ITGI has set a target of achieving Rs 750 crore during the current fiscal, Mr Ajit Narain said. Accordingly, the company proposes to focus on customer service as a gateway to growth with claim machinery geared to quick and efficient processes and settlements.

Apart from networking all its offices across the country, ITGI also has plans to come out with innovative products such as the recently launched `Deficit Rainfall Insurance cover' that provides indemnification to farmers in the event of shortage of rainfall, he said.

Stating that ITGI has so far tied-up with two State financial corporations formally for corporate agency, Mr Ajit Narain said the company would be signing similar tie-ups with five more SFCs in the country shortly.

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