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• 29% strong top-line growth; books Rs. 1480 crore premium during 2011-12
• Infuses additional capital of Rs.64 crore
Chennai, May 15, 2012: Royal Sundaram Alliance Insurance Company Limited (www.royalsundaram.in), a joint venture between Sundaram Finance and Royal & Sun Alliance Insurance plc, UK, announced its annual results for the year ended March 31, 2012.
Business Performance
The Company has achieved a strong top-line growth of 29% by underwriting Rs 1479.79 crore GWP during the financial year 2011-12, as compared to GWP of Rs. 1143.99 crore, in the previous year. This robust growth makes Royal Sundaram one of the consistent performers amongst the private sector general insurance companies in the Country.
The Company has also recorded a Profit after Tax (after pool loss) of Rs. 0.22 crore compared to a loss of Rs.20.1 crore in the previous financial year.
Speaking on the performance, Mr. Ajay Bimbhet, Managing Director, said, “It is quite satisfying that we have been consistently outpacing the industry growth. Our current year’s growth is reflected in all lines of business and attributed to our prudent underwriting practices. Despite the challenges faced, Royal Sundaram has been able to keep pace with growth."
Motor Third Party Pool Loss
The Insurance Regulatory Development Authority (IRDA) decided to dismantle the Indian Motor Third Party Pool with effect from March 31, 2012 by way of orders issued on December 23, 2011, January 3, 2012 and March 22, 2012. IRDA also advised absorption of the losses of Third-Party Motor Pool as per the prescribed methodology in the order.
Based on this, Royal Sundaram’s minimum required claims provision for FY 2011-12 was Rs.117.74 crore. However, the Company, as a matter of prudence, has provided for a higher amount of Rs. 222.49 crore, towards the Motor Pool losses so that the quantum of losses to be absorbed in the next 2 years stands reduced.
Earlier, during 2010-2011, the Company had absorbed a net loss of Rs. 75.81 crore based on the IRDA order dated March 12, 2011, increasing the loss ratio from 127 per cent (2009-10) to 153 per cent.
Capital infusion
The Shareholders of Royal Sundaram had infused an additional capital of Rs.64 crore (including a share premium of Rs.24 crore), during March 2012 in order to maintain the stipulated solvency margin and address the capital requirement position impacted due to absorption of the losses from Motor Third Party Pool.
"Royal Sundaram has maintained a solvency margin of 1.36 times as against 1.30 times, stipulated by the Regulator for the year ended 31st March 2012". This infusion of Rs. 64 crore is a reaffirmation of our Shareholders' confidence in the Company's promising performance.” said Ajay Bimbhet.
Commenting on the portfolio performance and strategy, Ajay said, “A significant contributor of our overall growth has been the drive from Government initiated health scheme RSBY and other rural insurance business. Going forward, we will continue our focus in further developing the growth in Retail business, with greater emphasis on Retail Health Insurance business and SME business. We are prepared to deliver ‘value for money’ propositions to our customers with a comprehensive product suite and excellent service.”
About Royal Sundaram
Royal Sundaram Alliance Insurance Company Limited is a joint venture between Sundaram Finance and Royal & Sun Alliance Insurance plc, UK, where the former holds 74% and the latter holds 26% of the equity. Royal Sundaram is the first private non-life Insurance Company licensed to operate in India.
Royal Sundaram offers a range of innovative general Insurance products which includes Motor, Health, Personal Accident, Home and Travel Insurance for individual customers. The Company’s Accident & Health claims process received ISO 9001-2008 certification for effective customer service delivery. For Commercial clients, Royal Sundaram offers a wide range of specialised insurance covers in Fire, Marine, Engineering, Liability and Business Interruption risks. Royal Sundaram also offers specially designed products to the Small and Medium enterprises and Rural customers. Royal Sundaram currently has over 5 million customers, 1700 employees and its products are distributed in over 180 cities across India, through Agents, Distribution Partners, Affinity Partners and Brokers.
About Sundaram Finance
Sundaram Finance, a Non-Banking Finance Company, is one of the most respected financial services companies in India. It finances the entire range of commercial vehicles, passenger cars, construction equipment & tractors. The Group's operations also extend to Insurance, Asset Management, Home loans, Business Process outsourcing and Infotech Solutions. Sundaram Finance has a Nationwide presence with over 500 branches and over half a million customers and depositors who are serviced by over 4000 employees.
About RSA
With a 300 year heritage, RSA is one of the world’s leading multinational quoted insurance groups. It has the capability to write business in over 140 countries and major operations in the UK, Ireland, Scandinavia, Central and Eastern Europe, Canada, Asia, the Middle East and Latin America. Focusing on general insurance, it has around 23,000 employees and, in 2011, its net written premiums were £8.1 billion.
For further information:
Saradamani Dey
Royal Sundaram Alliance Insurance Company Ltd.
saradamani.dey@royalsundaram.in