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National Insurance chalking out Nano insurance scheme - Silicaon India.com

27 March, 2009

State-owned non-life insurance company National Insurance, which tied up with Tata Motors two months ago, expects the comprehensive insurance premium for the auto major's small car Nano to be around Rs.3,000-Rs.4,000 a year initially, a top company official said here Wednesday.

"If we provide the insurance for Nano, rates would be adjusted after studying the accident claims for a period of at least a year," V. Ramasaamy, chairman and managing director of the company said on the sidelines of the launch of a new corporate identity and logo for National Insurance.

The company, along with other insurers such as the public sector United Insurance and private insurer Royal Sundaram, has entered into an agreement with Tata Motors for providing insurance of all vehicles manufactured by the auto major.

National Insurance general manager R.K. Kaul said under the agreement with Tata Motors, the insurance companies would provide cashless claim settlement to all Tata Motors vehicle owners.

"Since we already have a tie-up with Tata Motors, under that agreement we are likely to provide insurance for Nano also," Kaul said, adding that the scheme was at a pilot stage and was being tested at select locations.

Maruti Suzuki has a similar tie-up with National Insurance since 2002.

Motor insurance, which forms 51 percent of the company's portfolio, stagnated in the current fiscal due to global meltdown. "It only grew one percent this year. But with the Tata Motors tie-up, we expect it to pick up next year," Ramasaamy said.

National Insurance has a market share of 13.7 percent - down from 20 percent it enjoyed four years ago. Ramasaamy attributed this to the influx of private sector players.

The Kolkata-based company is now looking at structural changes in its business, Ramasaamy said. "We are contemplating changing our structure. We are thinking of making it into a three-tier structure from a four-tier set-up. In a few months we will migrate to that system. It is at the discussion stage now."

The current four-tier system consists of branch offices, divisional offices, regional offices and the head office in Kolkata.