Oriental Insurance eyes over 400% rural growth

Oriental Insurance Company plans to consolidate its market position in the rural area by targetting a growth of around 400 per cent .

The company has recently tied up with the Department of Posts for the distribution of its policies, while it has alliances with the Oriental Bank of Commerce (OBC) and the State Bank of Saurashtra (SBS) to sell polices.

"We want to consolidate our base in the rural sector, where the insurance penetration is only around seven per cent. With our recent tie-up with the postal department, which has more than 1.5 lakh post offices, and with our existing tie-ups, we are targeting a business of around Rs 900 crore from the rural sector," said B S Basin, regional manager, Oriental Insurance Company.

At present Oriental procures a business of around Rs 225 crore from the rural sector, a 7.5 per cent share of the company's total business of around Rs 3,000 crore.

However, with aggressive marketing, the company targets a business of around Rs 900 crore in the next financial year, a growth of around 400 per cent.

"The purpose of introducing private players in the insurance sector is not solved as they are not reaching the rural sectors," said Basin.

For 2002-2003, Oriental's growth rate of 14.79 per cent on a gross premium of Rs 2,868 crore was the second best among the four non-life public sector insurance companies, next only to National Insurance Company and followed by New India Insurance Company and United India Insurance Company.

Oriental Insurance also had the lowest retention ratio among the four non-life public sector insurance companies, while the company closed with the highest management expenses ratio to gross direct premium and second highest net incurred claims ratio.

The management expenses of the company was Rs 652.59 crore, which is around 22.75 per cent to the gross domestic premium.

The company has net incurred claims of Rs 1,466 crore, around 77.25 per cent to the net premium in the financial year 2002-2003.

"For the Ahmedabad region, we are expecting to close the year with a premium collection of Rs 130 crore as against Rs 122 crore in the last financial year. The company targets Rs 170 crore for the next financial year, a growth of over 30 per cent," said Basin.