Bharti Axa hopeful of signing a bancassurance deal in 2011November 30th, 2010 - 7:08 pm ICT by IANS
Chennai, Nov 30 (IANS) The Bangalore based private non-life insurer Bharti Axa General Insurance Company Ltd is planning to increase its presence in tier II and III cities next year and also sign up a bank to distribute its products, said a top company official.
The firm is planning to add around 100 points of presence (POP) in cities.
“We plan to add 100 POPs next year to our existing 122 POPs. These are single man offices and based on the response and potential the POPs may be scaled up to a branch. On the bancassurance side we are talking with eight major banks and hopeful of signing with one next year,” chief operating officer Kimsoon Chua told reporters here Tuesday.
According to him, the company is hoping to close the calendar year with a premium of Rs.500 crore as against around Rs.300 crore earned during 2009.
“As of October, our premium income is Rs.450 crore, of which motor insurance contributed 67 percent, health 10 percent, property 15 percent and the balance by marineransit and other businesses,” he said.
On the sales channel wise business, he said the agency force brings in around 60 percent of the business and the balance is brought by corporate brokers (30 percent) and direct sales force (10 percent).
Queried about the company’s reluctance to underwrite fire insurance, he said: “We are not running away from that business. The premium rates are uneconomical. However we are selecting our customers. Our focus is not on the topline alone.”
According to him, the premium rates have bottomed out and it is now firming up.
“The public sector companies have built huge reserves over the years and they are in a position to bear the effects of low rates whereas the private life insurers have not built such reserves,” he remarked.
He said the company is also focusing its efforts on French companies based in India for corporate business.
Bharti Axa General is betting big on health insurance and has filed some products and add-on risk covers with the insurance regulator for approval.
He said as per the business plan, the shareholders will be pumping around Rs.250 crore fresh funds over the next two years and Rs.650 crore over a period of five years.
As on Sep 30, 2010 the company’s equity capital stood at around Rs.275 crore.
Chua replied in the negative when queried whether the company would appeal against the Rs.10,00,000 fine levied by Insurance Regulatory and Development Authority (IRDA) in August this year for violating the licensing norms after changes in ownership pattern.
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