Comments
At a time when penetration of general insurance products, particularly, health, has been poor in the semi-urban and rural areas, Magma HDI General Insurance Company plans to offer health insurance to its customers in these markets.
The general insurance company — a joint venture between Kolkata-based Magma Fincorp Ltd and Germany-based HDI-Gerling International Holding AG — will leverage the branch network and customer base of Magma Fincorp to achieve volumes.
Magma provides finance for cars, commercial vehicles, construction equipments, used commercial vehicles, tractors and small and medium enterprises, among others. Over 80 per cent of its 278 branches are located in the semi-urban and rural areas.
New products
Magma HDI, which commenced operations in October 1, 2012 with motor insurance, plans to come out with “tailor-made” health and crop insurance products to cater to the needs of people living in semi-urban and rural areas, Swaraj Krishnan, Chief Executive Officer of Magma HDI, said.
The company will file its health insurance product with the Insurance Regulatory and Development Authority by the end of this month.
The company is in the process of collating data to devise a product best suited to the needs of people in these markets.
Based on its preliminary study, Magma HDI has noticed that customers in rural areas usually have to compromise on the sum assured to buy a product that fits into his or her budget.
Cost of treatment
“The cost of medical treatments is no different for a customer living in rural or semi urban areas but the income level of people in these areas is cyclical in nature. So he should be given adequate cover but at the right price point,” Krishnan told Business Line .
Servicing health insurance is yet another challenge given that there is little or no primary health infrastructure in place in these markets.
For its crop insurance product, Magma HDI is in talks with NGOs to provide cover to a group of small and marginal farmers across the country. It might take two-three months for the company to come out with the product for this segment, he said.
Business Growth
Magma HDI aims to earn premium income of around Rs 500 crore in 2013-14. It had earned a premium income of around Rs 96 crore during the first five months of its operation (October 2012-March 2013).
The company is in the process of developing a distribution roadmap. “Rural and semi-urban areas have its own challenges. You need to develop a local connect to reach out to people,” he said.
The general insurer plans to scale up its agent strength to 1,500 from the current 500 by March next.
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.