After a successful tenure at the helm of United India Insurance, G. Srinivasan took over as the Chairman and Managing Director of New India Assurance, the country’s largest general insurance company, in October 2012. In a sense, this is a return to home ground since this is where he began his career as a direct officer in 1979. The company, which has embarked on a massive recruitment drive of agents, aims to enlarge its retail portfolio and mop up 12,000 crore of premium this year.
How has this half of the fiscal year been for New India? What are the changes that you are looking at?
The first half of this year has been reasonably good. The company made a profit after tax of 205 crore which is 115 per cent more than the corresponding period last year. Going forward, we hope to maintain this trend of good profitability.
During the last two years, IRDA’s additional provisioning for the motor pool, has hit the profitability of all the general insurance companies. But that issue is over finally. So, from the current year, the profitability of general insurance industry will be better than that of last year. The industry is also improving in the sense that rates are ultimately becoming better; in fire and engineering insurance, rates are going up. In group health segment also rates have gone up and stabilised. And in the retail health segment also, companies have got an increase in prices from the regulator
In third-party motor segment, the rates are administered by the regulator. Though we had a big price increase last year of 68 per cent in commercial vehicles, it is still below the viable levels. IRDA has put in place a transparent formula which takes into account inflation, management expenses. However, the problem is that the start itself is 40 per cent lower than what it should be. So a onetime correction of 40 per cent is required.
New India has witnessed a dip in market share in the Indian market; however, your overseas market share has gone up. What are the reasons for this?
See there are 27 companies in the market, New India is the market leader. With so many companies, there has been some erosion in market share over a number of years. But this year we are growing at a rate which is closer to the market share. We have large foreign operations which accounts for 18 per cent of our premium. This year, we hope to complete 10,000 crore of premium from the domestic market and 2000 crore from our overseas operation.
What changes are you looking at on the distribution side?
We are very keen on enhancing our agency channels. Today, we have around 45,000 agents and company has decided that by March 31, 2015 we will reach one lakh agents. We have also gone on a massive drive of opening micro offices in smaller centres. In the last two months we have opened 200 one man offices in smaller towns and villages. We plan to open another 100 such micro offices in the next 2 months.