National Insurance foresees dip in motor insurance business

Kolkata, Nov 29: The state-run National Insurance Company is apprehensive of a 1-2 percent drop in its motor insurance business from the ongoing month due to the economic slowdown, a top official of the company said Saturday.

"The rate of growth was higher till October. But maybe, the business will go down 1-2 percent when we calculate the figures post-October," the company's chairman-cum-managing director V. Ramasaamy told newspersons on the sidelines of a programme here Saturday.

"But the slowdown will affect the new vehicle business as sale of automobiles have gone down. So, we are concentrating on renewals," he said.

Motor insurance business comprises 51 percent of the company's overall portfolio.

National Insurance, which earned a premium of Rs.40.24 billion in 2007-08, has targeted an 11 percent growth in the current fiscal to boost the earnings to Rs.45 billion.

In health insurance, which formed 17 percent of the company's business in 2007-08, Ramasaamy said he hoped the figure to be 20 percent in 2008-09.

"Last year, we received a total health premium of Rs.6.80 billion. This year, we hope to raise it to Rs.9 billion, which will be 20 percent of our business," he said.

Asked about the potential in the country's health insurance sector, he said: "As per an estimate after March, 2008, the country's total business potential is Rs.500 billion. Of that, all the insurance firms combined have tapped only Rs.51 billion".

From bank assurance, the company is expected to earn Rs.30 billion by the end of this fiscal, as against Rs.24 billion last year.

"Now, we have a tie-up with 26 banks in the country. We hope to add a couple of banks this fiscal," Ramasaamy added.