NIC looks to boost motor insurance biz - The Hindu Business Line
26 March, 2009
NIC looks to boost motor insurance biz
To extend cover for Tatas' Nano; unveils new logo.
The National Insurance Company Ltd is hoping to boost its slackening motor insurance business in 2009-10 through a distribution tie-up with Tata Motors for extending insurance cover for Nano.Along with United India Insurance and Royal Sundaram Insurance, NIC had recently entered into a tie-up with the car manufacturer for extending motor insurance cover to customers through the newly-formed Tata Motors Insurance Broking and Advisory Service Ltd. The public sector general insurer is currently in talks with Tata Motors for covering Nano and has been working on the premium amount payable for the car, according to senior officers of the company.
While the distribution tie-up was launched on a pilot basis in Kolkata, Bangalore and Mumbai, the countrywide launch is expected in April, the same time as the start of bookings for Nano.
"We expect our motor premium to grow in 2009-10 if we extend insurance cover for Nano as the car is expected to sell in large numbers," Mr V. Ramasaamy, Chairman and Managing Director, said here on Wednesday on the sidelines of a conference organised to announce the change in the company logo.
The annual premium for the car may be worked out at nearly Rs 3000, as premiums are generally pegged at 3 per cent of the car price, he said. The insurer may have to sign a separate contract for the car, as the earlier tie-up was for existing commercial vehicles only, he added.
Motor insurance, which accounted for 51 per cent of NIC's total premium portfolio last year, may decline by 2-3 per cent in 2008-09. It may collect Rs 2,100 crore from motor insurance by March, growing marginally by 1 per cent compared with last year, Mr R.K. Kaul, General Manager, NIC, said while adding that the segment may register a higher growth at 10 per cent in 2009-10.
"The slump in the automobile sector, coupled with detariffing, had shrunk motor premiums this fiscal. However, the recent tie-up with Tata Motors and stable premium rates may lead to a higher growth for motor insurance premium in 2009-10," he said.