National Insurance may ink sale pact with life firm

In a first-of-its kind move, public sector general insurance company National Insurance Company will tie up with a life insurance company to cross sell each other's products.

The deal is expected to be signed in a month's time. National Insurance Company chairman and managing director H S Wadhwa said in Ahmedabad on Friday that it has sought the Insurance Regulatory Development Authority of India's (IRDA) permission for such a tie-up.

Declining to name the tie-up partner, Wadhwa said: "The deal will be made public within a month from now. We have filed an application with the IRDA in this regard."

Asked if the existing guidelines permitted a general insurance company and a life insurance company to cross sell each other's products, Wadhwa said: "There is no precedent in India of a life insurance and general insurance company cross selling each other's products, although the practice is prevalent abroad. But we are optimistic of getting the permission."

Although Wadhwa refused to name its tie-up partner, probabilities of National Insurance cross selling the products of a private insurance company seem remote.

It thus appears that the company may rope in the Life Insurance Corporation for such an arrangement.

According to IRDA figures, National Insurance has emerged as the largest general insurance company in the country for the first half of the year, collecting a premium income of Rs 2,071.49 crore.

Two years ago NIC was ranked the lowest among the four public sector general insurance companies as far as premium insurance collection was concerned.

"The company is targetting a premium income collection of at least Rs 4,500 crore, which will represent a rise of around 30 per cent in our premium collection over the past year. Our net profit, which stood at Rs 73 crore last year, is also expected to surge in a big way and end up between Rs 300 crore and Rs 400 crore by the end of the current fiscal," Wadhwa said.