Customised solutions the key, says ICICI Lombard head honcho

Sandeep Bakhshi

Marine insurance is a highly specialised business which gets little public attention. Private players have not been able to make much headway in this business.

One private sector firm that has ventured into this segment is ICICI Lombard General Insurance Company, which is a 74: 26 joint venture between ICICI Bank, India's second largest bank, and Lombard Canada, a group company of the $26 billion financial services group Fairfax Financial Holdings.

Sandeep Bakhshi, managing director and chief executive officer, ICICI Lombard General Insurance Company, says in an interview with Business Standard that the company has differentiated itself in the market place through customer service.

How is marine risk insurance different from other segments in general insurance? What are ICICI-Lombard's plans for this segment?

Marine insurance firms insure ships and the cargo carried by them. Marine insurance, like fire or engineering insurance, is also property-related but it has certain distinctive characteristics. Unlike most property-related cover, in this case you have to insure a moving asset.

Secondly, while all other asset-related policies are categorised as unvalued policies, marine insurance is based on what is called as agreed value. In the case of unvalued policies, the settlement is based on market value subject to the overall liability being capped at the sum insured.

In the case of an agreed value policy, the settlement will not have any basis on market value but be based on the sum insured under the policy.

ICICI Lombard has been licensed to transact all kinds of general insurance business. As most Indian corporates require marine cargo insurance for their inland transits as well as for exports and imports, we have been providing such solutions to all our clients. This includes catering to the marine hull & liability insurance requirements of the shipping community as well.

What has been ICICI-Lombard's experience in this segment? Who are your major clients?

We have focused on providing customised and hassle-free solutions to the clients by leveraging on our in-house underwriting expertise and technology platforms. We have also focused on prompt servicing of claims.

For marine hull insurance we have a team of experienced professionals who were roped in from the existing general insurance players in the Indian market, Indian purchasers of general insurance as also from insurance broking firms.

We have participated in the marine insurance coverage for many shipping companies as also for many industrial and trading organisations such as GE Shipping, Essar Shipping, Ocean Sparkle, Surendra Overseas, Tolani Shipping and Chowgule Steamships.

What has been Lombard's experience in the marine insurance segment globally? What are the global products that have been introduced in the Indian market? Is Lombard's global experience being leveraged in the Indian marketplace?

Marine insurance policies issued by domestic insurers, both for vessels and the cargo, are wholly governed by the international marine insurance practices.

Whatever policies exist internationally, including in the developed countries, are available in India. All these policies are broadly classified under two heads _ marine hull insurance and marine cargo insurance.

ICICI Lombard offers all such policies. In this context, Lombard's international experience is also drawn on as and when required.

How has ICICI Lombard differentiated itself in this sector from other players in the Indian market?

In view of the international character of the business, the scope of cover, terms and conditions are standardised globally. Further, the premium rates for insurance for vessels are totally governed by a tariff system in India.

It is, therefore, necessary that all the companies have to uniformly apply the same rates of premium as also the terms of cover. For marine cargo insurance, even though the rates of premium are left to individual companies, the terms of cover and the policy wordings are standardised.

The differentiation by any company will, therefore, have to be demonstrated in the areas of customer service.

ICICI Lombard has already established its uniqueness in customer service by concentrating on risk advisory services as a prelude to conclusion of contract and technology driven documentation leading to accuracy and speed.

Further, we offer speed and justice in settlement of claims. On the marine cargo insurance front, we have pioneered technology-based solutions for our clients.

How big is the Indian marine risk insurance market? How much will it contribute to ICICI-Lombard's turnover?

The marine insurance business, both hull insurance and cargo insurance put together, roughly contributes around 8 per cent of the total general insurance business of the Indian market.

Of this, marine hull insurance will have a share of 3-3.5 per cent, while the balance would relate to marine cargo insurance.

The contribution of the marine insurance business to the overall business of ICICI Lombard is on similar lines.