Magma HDI General Insurance Company aims to earn Rs 100 crore premium income by the end of current financial years and plans to scale it up to Rs 300 crore by March, 2014.
The joint venture between Magma Fincorp, a non-banking finance company, and Germany's third largest insurance group HDI General launched its operations today.
"Initially, we will sell only motor insurance products because we have the necessary approvals in place. We also plan to enter health insurance space," Swaraj Krishnan, managing director of Magma HDI General, told Business Standard.
He added that the joint venture partners have a clause in their agreement that will allow HDI General to increase its stake to 49 per cent in the company.
As per current norms, foreign investors can hold up to 26 per cent stake in a domestic insurance company. But now the government plans to increase this cap to 49 per cent.
Magma HDI General, which is the first general insurance company to have its headquarter in eastern India, will focus on semi-urban and rural centres to drive its business growth.
"Over 80 per cent of Magma's 240 branches are located in the semi-urban and rural areas, which are generally underserved markets for insurance products. Magma HDI General will remain consistently focused on servicing the needs of the customers located in such markets thereby furthering the cause of financial inclusion," Sanjay Chamria, chairman of the insurance company, said in a statement.
The company will initially set up 39 offices and plans to increase it to 100 by the end of next financial year. It also plans to grow its headcount to 500 from the current 100 employees during this period.