The Indian insurance industry might be battling de-tariff-induced price fall, but the niches offer scope for good profits, said Mr Praveen Gupta, Managing Director & CEO, Raheja QBE General Insurance Company.

The company, an Indo-Australian joint venture, is active in the niche areas. For instance, its products include professional indemnity, port operators liability cover, and public offerings and securities insurance. It is bringing in products again for select niches, such as medical insurance. Filed for approval of the Insurance Regulatory and Development Authority is medical malpractices insurance.

In many of these areas, only public sector insurers have competing products, but they are the biggies of the insurance industry and do not chase these niches with the same gusto as companies like Raheja QBE. The company expects to prove this point by achieving breakeven in the current year, its third year of operations. Last year, its premium income was Rs 8 crore. “Remember, we don't do any motor, health or property,” Mr Gupta, who was here to open a branch in Chennai, told Business Line today.

A breakeven in the third year and that too with an underwriting profit is counter-intuitive, but Mr Gupta pointed out that the company's expenses are very low. “We have 27 employees. The next biggest insurance company has at least a thousand.”

Besides, until now Raheja QBE has been operating only from Mumbai, doing business only through the broking community rather from branches – a major overhead saving.

Again, Mr Gupta said the company retains a lot of the risk it underwrites and any reinsurance is within the group.

That will change, though. Deciding that now is the time to also do branch-based business, the company now plans to open offices in six more cities. Overheads might go up, but so will business, for, on the anvil are plans for a plethora of new products. Nearly 18 products are awaiting approval – most of them for niche areas.

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