Royal Sundaram sets eye on tier-II, III cities for growth - mydigitalfc.com
18 June, 2009
Royal Sundaram Alliance (RSA) General Insurance will strengthen its distribution network, particularly in tier-II and III cities, to achieve its growth target for the present financial year. The company officials didn't share the targets. The company collected a premium of Rs 806.22 crore in the previous financial year, clocking a 15.73 per cent growth over the Rs 696.63 crore collection in the year before. The general insurance industry grew by an aggregate 9.09 per cent in the present financial year. Royal Sundaram Allia-nce says it will focus on cost-effective online marketing to sell products. It will move aggressively in the retail segment, especially in health and motor insurance. "We are going all out to ramp up our distribution network. We are always exploring innovative ways to distribute products. With falling premium prices putting pressure on margins, the industry needs to find innovative, lost-cost ways to distribute products with lesser intervention of intermediaries," says Ajay Bimbhet, managing director of Royal Sundaram Alliance Insurance.
"Marketing a product directly to a customer and internet marketing reduce acquisition cost and policy fulfilment cost, making them most economical to market retail products," he points out. The company does not plan to infuse additional equity this year. The present capital base is Rs 210 crore.
Royal Sundaram Alliance Insurance is also planning to launch some add-on products in the motor insurance space. The add-on will be available with no depreciation cover, spare/replace-ment car cover or voluntary deductibles. The company is waiting to get approval from the Insurance Regulatory and Development Authority (Irda). Asked if Royal Sundaram Alliance's foreign partner, RSA Insurance Group, will raise its stake in the company from the present 26 per cent to 49 per cent when the Insurance Amendment Bill is cleared by Parliament hiking FDI limit, Bimbhet said,"The industry is keenly watching the development with high expectations. A hike in the FDI limit will bring in the much-needed capital infusion into the industry and will enable us to ramp up growth. In order to expand our retail business and create brand awareness, there is always a need for immediate capital, which can be addressed by such fund infusion," he pointed out.