ICICI Lombard to focus on health insurance

India's largest private non-life insurer ICICI Lombard General Insurance will now focus on achieving a larger share of premium income from retail line of businesses and reduce dependence on corporate business this year.

The company has set a target of achieving 60 per cent of premium income from retail insurance in FY08. Among the personal lines, the insurer will mainly focus on health insurance, which contributes 23 per cent to the total premium income.

According to Sandeep Bakhshi, MD and CEO of ICICI Lombard General Insurance, corporate business though volatile is relatively easier to acquire, while retail business is more predictable and requires significant investment in distribution, systems, services and processes.

ICICI Lombard that had a corporate-retail business in the ratio of 90:10 in FY03 has been consciously reducing dependance on this line of business.

In FY04, it was 85:15, 70:30 in FY05, 50:50 in FY06 and was 45:55 for the first nine months in FY07. By December 2006, the company has reduced the fire and engineering portfolio from 72 per cent in 2003 to 22 per cent.

Similarly health insurance and personal accident insurance has increased from 8.7 per cent in 2003 to 23.2 per cent by December 2006. Motor insurance increased from 1.3 per cent in 2003 to 34.8 per cent by December 2006.

Bakhshi said, "We will be focusing on health in a major way. We will be launching new health products, increasing distribution and enrolling more hospitals. The health insurance portfolio will be witnessing a substantial increase."

ICICI Lombard will be focusing on retail to make its balance sheet less susceptible to localised losses and have a predictable top line. With more emphasis on retail, the company plans to ramp up its distribution from 220 branches spread across 166 locations and tap the rural market.

IL had a total premium income of Rs 2601.57 crore up to February 2007. It is the largest player among the eight private players in terms of health and liabilities.

According to the company officials, it is incrementally doing 20 per cent of health policies, 25 per cent of new cars, 8 per cent of existing cars on road and 30 per cent of the new two-wheelers.

According to industry estimates, the non-life insurance industry is expected to grow at CAGR of 25 per cent while retail growth is anticipated at 35 per cent per annum. Health insurance and rural markets are expected to be growth drivers.