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Posted on Sep 03, 09:59PM | IANS
City-based Cholamandalam MS General Insurance Company (Chola MS) is targeting a premium of Rs.2,500 crore by fiscal 2014-15, a top company official said Monday.
To achieve this, the Murugappa group company will leverage its client base and distribution network of group companies, re-enter commercial/corporate business lines and target Japanese and Korean companies in India.
"We had temporarily reduced our focus on commercial lines of business (fire and other insurance policies taken by corporates) as public sector companies resorted to heavy discounting of rates earlier. With the discounting now stopped we will reenter the segment. Large Japanese investments are happening in the country giving us an opportunity," A. Vellayan, executive chairman of the Group, told reporters here.
The Rs.1,346 crore premium Chola MS is a 74:26 joint venture between the USD 4.4 billion Murugappa Group and the Mitsui Sumitomo Insurance Group of Japan.
According to S.S. Gopalarathnam, managing director, Chola MS is leveraging the non-banking finance company (NBFC) Cholamandalam Investment Finance Company for distribution of its products among the latter's customers.
"We are also working with group companies Tube Investments (TI), EID Parry and Coromandel International to sell our policies. TI makes bicycles and we provide insurance to the cycles. We are using the retail outlets of Coromandel International to insure the farmers and the tractors. Similarly, EID Parry's sugar division has large number of farmers. We are looking at insuring them," Gopalarathnam said.
Gopalarathnam said the company would expand its retail health portfolio from Rs.50 crore last year to Rs.500 crore over the next year.
According to him, nearly six percent of the company's business is from Japanese and Korean companies in India.
He said the company is targeting a premium income of Rs.1,600 crore for this fiscal and grow it to Rs.2,500 crore by 2014-15.
Stepping into the 11th year, the company has also hired global consultancy firm McKinsey and Company to chart a roadmap to be at the top three companies in terms of underwriting profits (premium minus claims outgo) over the next two-three years.
Chola MS is targeting an operating profit of Rs.150 crore in a couple of years time.
According to Insurance Company Ltd, the company operating in 40 countries with 878 offices is expanding its overseas network to diversify its risk.
Asked whether Mitsui Sumitomo will increase its stakes in Chola MS from the current 26 percent as and when the law permits, Yasuyoshi Karasawa, president of Mitsui Sumitomo, told IANS: "We would consider it positively and in consultation with the Murugappa group."