ORIENTAL INSURANCE EYES 10% GROWTH IN PREMIUM

Bangalore: Oriental Insurance Company, a state-owned general insurance firm, has stated that it plans to grow its premium collections by 10 per cent during the current financial year as against the nominal growth recorded in the last fiscal, which reported a collection of Rs 3,900 crore.

The company is actively implementing comprehensive proposals on business process re-engineering advised by the Boston Consulting Group in an effort to stave of increased competition from private players. During the first quarter of the current financial year, the company has reported collections of Rs 1,100 crore.

“We are cautious. The premium rates are falling and there is a maddening rush to maintain the top line growth. Last year, there was hardly any growth and we intend to improve our performance during the year,” Chairman and Managing Director M Ramadoss said.

Ramadoss was in Bangalore to launch a series of initiatives aimed at retaining its customers. The company launched a service through which a car-owner, insured by Oriental, if stranded with a break-down on a highway, can access various TVS Group’s authorised garages to have the vehicle repaired, at no cost to the customer.

“This is one of the steps we are taking to face competition. During the last quarter, our average settlement claim in certain markets was brought down to 15 days from the earlier 78 days. This exercise will be expanded across India, through which we anticipate that the renewals will be higher,” Ramadoss said.

These initiatives are much needed for this general insurer as during the first quarter of the current fiscal, it was displaced from its fourth position by ICICI Lombard, a private insurer. On an average, Oriental writes in close to a crore policies.

Oriental Insurance, which currently has a Rs 8,000-crore investment portfolio, invests 55 per cent of the portfolio in unregulated investments such as equities (18 per cent) and mutual funds. Explaining his company’s investment outlook for the bearish market, Ramadoss said, “Given the current (state of the) equities market, we are now focusing on investing in bonds.”

Ramadoss once again reiterated his stand that the central government should allow state-owned general insurers to go public.

Source: Business Standard, Deccan Chronicle