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Royal Sundaram bets on customised plans

15 May, 2008

Like most general insurers, Royal Sundaram Alliance Insurance (RSA) too has witnessed a slowdown in growth of premium income in the detariff regime.  To get back, the company is planning to offer differential pricing and policies to customers. The focus this year will be on the growth of personal and commercial insurance, and the company will aim for at least 15% growth.  At present, customers get a choice of prices for the products sold by general insurers, but not on the terms and conditions of the specific policy.  Customised insurance products could be introduced in a few months from now across all categories, including fire, motor and marine. "We are closely working with leading actuarial consultants to assist us in gaining technical knowledge," Ajay Bimbhet, managing director, RSA told DNA Money. 'We will be able to offer innovative value-added products and differential propositions once the relaxation on policy covers, terms and conditions comes into effect."  "Our focus will be on the growth of select segments in personal and commercial insurances. We believe this is the best approach to increase insurance penetration. The company will also focus on distribution enhancement to access more locations across the country," Bimbhet added. As per Insurance Regulatory & Development Authority data, RSA has a 2% market share at present.


The company has underwritten gross premium of Rs 695.16 crore for the year 2007-08, a growth of 15.75% over the previous year. Motor insurance is the company's largest portfolio, contributing 58% of total premium.  Health contributes around 21%, while commercial insurance, which includes property and engineering insurance, contributes around 19%. About 7% of premium comes from the personal insurance category. Does the company bother about market share and their slower growth? No, says Bimbhet: "Since inception we have been prudent in risk selection while remaining focussed on our bottom line. This strategy has paid dividends and our profit ratios have shown a market improvement" "Though tariff abolition has challenged our ability to sustain this trend, we will continue to be focussed on delivering profitable growth in the future," he adds.

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