Magma HDI General Insurance Company Limited which started its operations earlier this month, will focus on the retail segment and target semi-urban markets in Tier II and Tier III towns. It plans to leverage the distribution network of its principal promoter, Magma Fincorp, said Swaraj Krishnan, Chief Executive Officer, Magma HDI.
The general insurance company is a joint venture between non-banking finance company Magma Fincorp, which holds 74 per cent stake and Germany's third largest insurance group HDI General.
Krishnan said the company will look at new products for the customers in the semi-urban market and try to simplify the process of buying an insurance policy such as reducing the number of application forms.
The company is in talks with a life insurance company to jointly offer combo products, Krishnan added. He however, did not disclose the name of the company. These products could be motor without third party insurance plus life insurance or life plus health plus householders insurance.
"Although Irda regulations allow for combo products, nobody is offering it as of now. Maybe the issues are how the split the premium. In life insurance the pricing is more structured, whereas in general insurance it is not as there is not so much data to work on," he said.
The company has got approval for motor insurance and has launched four products. Since the launch, on October 11, it has booked Rs 15 crore worth of premium. The target is to break even in four years.
"We will need four years since our target is policies where the average premium size is about Rs 2,000. Therefore, we will need large volumes,'' Krishnan said.
Apart from using the 240-odd branches of Magma Fincorp, the insurance company plans to hire about 3,000 agents by 2014. The company may also tie up with micro finance institutions and non governmental organisations to increase its distribution, he added.
