New India retains Rs 40,000cr Reliance account

The New India Assurance Company has retained its leadership in the renewal of the Rs 40,000-crore plus Reliance Industries (RIL) account.

Reliance has renewed its one-year risk cover for 2004 at a lower premium of Rs 142 crore against last year's Rs 156 crore. One of the largest corporate accounts was being keenly eyed by other public sector insurance companies, but New India Assurance managed to retain its leadership since 1999.

Being a large policy, the cover continues to be co-insured with National Insurance Company, Oriental Insurance Company, United Insurance Company as well as Reliance General Insurance Company, as in the case last year.

The one-year risk cover is due for renewal in 10 days, but RIL yesterday signed the renewed policy with New India Assurance. Since the 2001 September 11 terrorist attacks, RIL has preferred not to approach international market for a mega risk policy as rates continue to rule hard. This will be the second year running that RIL insures its three complexes "" Hazira, Jamnagar and Patalgana "" in the local market.

The price at which RIL has renewed its risk policy stands reduced following better terms and conditions. Unlike mega risk policies, traditional policies excludes a lot of allied risks as the reinsurance component equally stands reduced. RIL on renewal is understood to have been able to include few of these exclusions, stated industry sources.

RIL had no option but to opt for a traditional cover from the local market as it would have otherwise had to pay almost Rs 500 crore had it opted for a mega cover from the overseas market.

Insuring corporate through mega risk covers was pioneered when RIL approached the international market for higher and more extensive coverage.