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Phalguna Jandhyala

`Company not launching new products in the immediate future'

New Delhi June 11 Iffco-Tokio General Insurance Company (ITGI), a joint venture promoted by Indian Farmers Fertiliser Cooperative (IFFCO) and Japan's Tokio Marine and Fire Insurance Company, expects its gross written premiums (GWPs) to touch Rs 1,200 crore during the current financial year.

Gross written premiums

The company reported a 28.58 per cent increase in its GWP to Rs 1,152.21 crore for the financial year ended March 31, 2007 against Rs 896.04 crore.

"We have set a conservative growth target looking at the market scenario. Since we are operating in de-tariffed market at the moment, the competition is going to be fierce and the market trends on premiums have changed. So we are looking at having our house in order before looking at high growth targets," Mr Ajit Narain, Managing Director and Chief Executive Officer of Iffco-Tokio General Insurance Company, told Business Line.

He, however, said though the company had set modest targets in its topline growth, it expects the bottomline to maintain the same growth rate as in the past.

ITGI's net profit for the fiscal under review increased 85.69 per cent to Rs 27.13 crore compared with Rs 14.61 crore in 2005-06.

For 2006-07, the retail line contributed approximately 55 per cent (Rs 634.6 crore) to the revenues, of which motor insurance was a substantial chunk at Rs 448.89 crore.

For the current financial year, according to the company's annual report, it is targeting Rs 450 crore from its commercial lines and Rs 750 crore from its retail portfolio.

Vending products

Though the company is not looking at launching new products in the immediate future, Mr Narain said: "We have launched specialised products - for fine arts collectors and galleries, errors and omissions policy for the ITeS sector - now we are looking at marketing these products better."

He said the company was looking at having various combinations of its existing products and also customising it to the needs of a specific area.

"In the last six years, we have invested around Rs 8 crore in upgrading our communication infrastructure and this year this is going to a major focus area and are planning to increase the investments quite substantially," Mr Narain said.

Market share

At the moment, the company has a market share of 4.56 per cent as against 4.4 per cent in 2005-06. "Looking at the anticipated impact of shift from the regulated market to a detariffed market and also expecting a couple of new players, we are looking at maintaining the current market share in the current fiscal also. Apart from this, since we anticipate growth from the retail lines we will enter into suitable understanding with intermediaries, enter into tie-ups with more dealers and banks," he said. Mr Narain also said Iffco-Tokio plans to increase the number of offices from the present 98 to 150 across the country by the end of the current financial year.

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