India Insure to acquire broking firms

Hyderabad-based insurance broking house, India Insure, is looking towards acquisition of a couple of broking companies in the country.

"We are looking at 2-3 companies at present and are hopeful of completing the acquisition in the next three months. We are ready to invest Rs 10-20 crore in this regard," company's managing director, V Ramakrishna, told Business Standard.

India Insure, which provides expert advice and assists in placing the appropriate insurance policy with the chosen insurer, was the first company to get a broking licence from the Insurance Regulatory and Development Authority in January 2003.

It is also the first broker to be upgraded from direct to composite status in 2006. The company has chosen to focus on the corporate and institutional market though it has been permitted to handle retail and individual business.

In 2006-07, Ramakrishna said, the nine-year old broking house had 250 clients and managed a premium amount of Rs 180 crore. The premium managed in the current financial year would be around Rs 250 crore and the number of clients would touch the 300-mark by June, this year.

"Our business has registered a 50 per cent growth this year when compared with last year. We expect to record the same growth rate in 2008-09," he said adding that the role of broking houses would increase in the post total de-tariffing period era starting from April 1, 2008.

According to him, at present only 25 per cent of the corporate insurers are approaching insurance companies through broking houses. "Three years down the line this percentage will increase to over 75."

He, however, said small broking houses would find it difficult to sustain as brokerage margins were thinning with increasing competition and insurance companies coming forward to offer discounts.

Stating that the insurance sector in the country was growing at a rate of 20 per cent per annum from the past four years, Ramakrishna said the current size of non-life insurance market in the country was estimated at Rs 25,000 crore per annum.

With healthcare becoming costlier, he was of the opinion that the health insurance segment would register the maximum growth rate in future.