Royal Sundaram non-life venture goes on stream
BS Bureau, 31 December, 2005
Royal Sundaram Insurance Company, a non-life insurance joint venture between Sundaram Finance Ltd and international insurance group Royal & SunAlliance Plc, on Tuesday started operations in the city. The initial capital base of the company is Rs 1.01 billion. Royal & SunAlliance holds a 26 per cent stake in the company, while the rest is with Sundaram Finance and its associates.
Bob Mendelsohn, group chief executive, Royal & SunAlliance, said, "Both the partners complement each other's strength. We bring to the venture the access to international expertise in developing products and services." He expects the domestic market to expand both in terms of products and choices, and hopes to take away certain percentage of business from the General Insurance Corporation (GIC). He ruled out the possibility of entering the life insurance business or asset management business at this juncture.
"At present, the company's products come with little customisation. It had applied with the Insurance Regulatory Authority of India (IRDA) for introducing new products," he said. "We expect the IRDA's approval soon and would launch new products in the next six months," said Micky Brigg, managing director, Royal Sundaram. He said, "Our main proposition is customer service. We see the timely settlement of claims a critical element of customer service." The company would initially concentrate on south India where Sundaram Finance has a strong branch network. Brigg hopes that the company would earn Rs 1.20 billion in the first year and has set a 50 per cent growth target on an annual basis. "We expect to break-even in the fifth full year of operation," he added.