National Insurance closes in on New India

National Insurance Company will close fiscal 2004 with a premium income of Rs 3,500 crore, coming neck and neck with market leader New India Assurance Company.

"We have missed the top slot this fiscal, but we should be the number one in the next few months," said H S Wadhwa, chairman and managing director, National Insurance Company. National Insurance was ranked fourth among the four state-owned general insurers till last year.

National Insurance's drive and its ability to gain entry into the risk business of top corporates such as Reliance and Tatas, as well as its tie-ups with banks has helped it move up three notches (in ranking) within a year. "We will exceed premium income of Rs 4,000 crore in the coming fiscal. This will be possible as we have a good personal rapport with a number of corporates and bank tie-ups, as well as recruitment of 50,000 agents," Wadhwa said.

National Insurance Company's share in Reliance Industries' Rs 40,000 crore risk cover for Jamnagar, Hazira and Patalgana refineries increased to 30 per cent from 5 per cent last year, as New India Assurance's stake came down to 40 per cent, from the earlier 70 per cent, market sources said.

In addition, National Insurance gained the business of Tatas this fiscal, Wadhwa said. The public sector insurer has also bagged Reliance Telecom's cover for its mobile handsets. "The total premium we have received from the Reliance group amounts to Rs 185 crore," said A K Banerjee, assistant general manager of National Insurance, who handles the Mumbai region, which brings in majority of the corporate business.

Following the recent voluntary retirement scheme at the four state insurers, National Insurance lost about 3,000 employees, costing the company Rs 300 crore in terms of a severance package. Since the company has clocked an investment income of Rs 550 crore, Wadhwa said the VRS dues will not affect its bottomline.

Speaking on April renewals, Wadhwa is confident that the company will see 20 per cent growth over the corresponding period last year.

Majority of corporate renewals take place on April 1, and National Insurance sees about Rs 250 crore renewals with fresh business to the extent of Rs 50 crore.

National Insurance's Mumbai region has seen growth levels of 25-30 per cent in fiscal 2004 compared with the company's overall growth rate of 20 per cent this fiscal, Wadhwa said. Against this growth level, other public sector insurers have experienced a growth rate of 0.3-3 per cent in fiscal 2004.

Against New India's premium income of Rs 3,229.5 crore as on January 31, National Insurance clocked a premium income of Rs 2,839.1 crore, according to figures given by the Insurance Regulatory and Development Authority.

Meanwhile, National Insurance is opening four additional regional offices as on April 1 as part of its expansion. Today, the entity has 20 offices.

"We are opening new regional offices in Nagpur, Baroda, Bhubaneshwar and Dehra Dun next month taking the total to 24," said Wadhwa. There is a scope to achieve a premium income of Rs 10,000 crore in next two to three years, he added.