Allianz wants to hike stake to 49% in Bajaj JV

Global insurance major Allianz wants to hike its stake from 26 to 49 per cent in the Indian venture Bajaj Allianz General Insurance when the government raises the foreign direct investment (FDI) cap in the sector.

"Allianz is willing to increase its stake in the Indian venture, as and when government rules permits it to do so,"said Kamesh Goyal,

chief executive officer, Bajaj Allianz. Allianz, which is the world's leading insurer with revenues of about $120 billion, has 26 per cent stake in the Indian venture while Rahul Bajaj's group has the majority 74 per cent stake.

Bajaj Allianz now has a capital base of Rs 200 crore and posted a net profit of Rs 47 crore last fiscal. The German insurer, which also has a life insurance venture with Bajaj, is keen on infusion of more capital in the life insurer. The foreign direct investment (FDI) cap hike would benefit the life insurance sector more than the general insurance, Goyal said.

Referring to the administered regime in the general insurance sector, Goyal said there was a need to de-tarrif the sector for the benefit of all stakeholders.

"De-tarrifing could significantly change the insurance scenario in the country. With this, the insurers might bring zone-based premium structures," he said.

He said the lucrative 4-wheeler market is poised for a big growth.

Five years ago, motor insurance business in the country was around Rs 4,000 crore, which was 36 per cent of the total general insurance business and now it is worth Rs 7,200 crore comprising 41 per cent of total general insurance business, Goyal said.

With de-tarrifing, motor insurance business could touch Rs 12,500 crore by 2010, he said, besides general insurance, the company also targets to increase its hold in the health insurance segment.

On rural foray, he said, "we are steadily making inroads into rural pockets. This year we succeeded in raising our market share in this market."

Besides this, he said the company has tied up with some co-operative societies and insured around 25,000 tractors.

On the Mumbai floods, he said "aftermath of the flood was a real test of time for insurance companies, since the magnitude of the flood was really grave. Still due to the immense competition among the various insurance companies the number of days of settling claims were drastically reduced."

Bajaj-Allianz successfully settled one fourth of its total claims within three weeks. "The hindrance in settling most of the claims was that the car owners got their cars repaired from small garages, which were not registered with the insurance companies."

Asked about hiring spree of private insurers, he said it has been the policy of private insurers to tap freshers, who can be moulded with their business ideology. "For this reason we preferred new talent against experienced insurance agents."

"If we had focussed on attracting only the insurance agents who have a settled business, it would have not expanded the market and this would have hampered the growth of sector," he said.