Mumbai, Sept 12
IFFCO-TOKIO General Insurance Company will have to shell out about Rs 240 crore to settle claims arising from the recent Mumbai floods.
These claims mainly relate to insurance cover for motor, industry, marine, shops, and offices.
"We have received about 4,000 claims, of which more than 70 per cent has been settled in terms of amount," said Mr Ajit Narain, MD and CEO.
He added that the company has decided to increase its capital base by Rs 50 crore this year to Rs 150 crore.
On whether it was linked to claims arising from the recent Mumbai and Gujarat floods, Mr Narain said that the decision was taken before these events.
The company has estimated to have claims of amounting to Rs 30 crore, of which over 90 per cent has been settled. Motor claims constitute the bulk of the unsettled claims since the delay in repairs of vehicles has prolonged settlement.
Last fiscal, 32 per cent of Iffco-Tokio's premium revenues of Rs 501 crore came from motor insurance. However, 53 per cent of the claims also came from this portfolio, he said.
"We have not launched motor insurance aggressively. But we are gradually building our database as well as the capability to service to improve this business."
With events such as the Mumbai floods, Mr Narain believes that the sale of householder policies could go up. "People in towns have the spending capacity. Awareness also goes up with such events."
However, the most profitable portfolio for the company has been office and professional establishment insurance policy, which covers against fire, burglary, breakdown of appliances, professional indemnity, and business interruption.
"With the emerging industrial townships like Gurgaon and Noida, this portfolio has grown by 10 per cent in 2004-05."
The portfolio mix of Iffco-Tokio includes fire (35.3 per cent), marine (six per cent), motor (32 per cent), engineering (9.5 per cent), and other class of business (17.1 per cent). In 2004-05, the firm grew by 53.7 per cent. As per IRDA figures, it currently has a market share of 2.88 per cent.