Iffco-Tokio General Insurance Company Ltd (ITGI), has initiated talks with Maruti Udyog Ltd for insuring the health of voluntary retirement (VRS) optees at the company.
"Talks are at a preliminary stage. We have already done marine risk policies for Maruti in the past," explained ITGI financial advisor, M K Tandon.
Meanwhile, ITGI has applied for two more general insurance products with the Insurance Regulatory Development Authority (Irda).
More From This Section
These will also be sold through the co-operatives but insurers will pay the premium unlike, Sankat Haran where the premium is paid by Iffco, Kribhco and Indian Potash Ltd.
Christened Krishak Mitra and Lok Swastha, the products are expecting clearance from Irda in a couple of weeks. "We have made a beginning with Sankat Haran. The other two products, currently in the pipeline, will also cater to rural India, explained Tandon.
With as many as 41,000 co-operative members under Indian Farmers Fertiliser Cooperative Ltd (Iffco), Tandon hopes to cover as many as four crore farmers.
Premium income from the product is expected to touch Rs 13 crore in the first year of operation. Sankat Haran comes complimentary against an extra payment of Rs 1, with each bag of fertilisers sold from the co-operatives.
Rural insurance at ITGI was targeted at four per cent of the total premium income at Rs 88 crore and the company hopes to break even in another four years at Rs 250 crore.
The company has already registered a premium income of Rs 25 crore in the first six months of operation. Subsequently, seven to eight per cent of the premium income at ITGI is expected to come from rural India.
The company is also exploring all possible avenues for marketing its products and "we do not have any inhibitions with regards to any institution," Tandon explained.
On the marketing front, the company will recruit 150 marketing associates in the next three years. Talking on reinsurance, Tandon said if reinsurance rates in the international market firm up and the tariff advisory committee takes a view "we will have to enhance our premium rates."
On the investment front, ITGI has made a conscious decision to refrain from making any investment in long-term instruments.
"We have been investing in short-term bank deposits, call money market, short term deposits, treasury bills and government securities with high liquidity," he added.