 "Announcement of listing plan in Budget is an indication of getting the listing done this year: K Sanath Kumar")
With the government announcing listing plans for public-sector general insurance companies, Kolkata-based National Insurance Company (NIC) is firming up plans to undertake a valuation exercise. K Sanath Kumar, the newly-appointed chairman and managing director of NIC, talks to Namrata Acharya about his vision to boost the company’s growth. Edited excerpts:
The government has announced the listing plans of general insurance companies. Has there been any discussion with the government about the listing plans of NIC?The government announced the proposal of listing four general insurance companies in the Budget. This is pretty much an indication for getting the listing done this year. We had some interactions with the ministry concerned.
Have you started any internal preparation for the listing?
Not yet. Possibly, for valuation, we might have to appoint a consultant. It will be an internal valuation exercise. All the public-sector general insurance companies have a huge embedded valuation, which has to be discovered.
Is there an imminent need for capital?
Essentially, none of the public sector general insurance companies is in dire need of capital now. However, if we go for further expansion and the regulator comes out with solvency-II norms, which is probably down the line, we might need capital.
What are your focus areas of growth this year?
This year, we have two-to-three thrust areas. Currently, we are at a sub market-growth rate. The general insurance market has been growing at 12 per cent. Our growth has been eight per cent. We are looking for a minimum 15 per cent market growth. This year, the focus will be on digital platform consolidation. We need to have central data storage and core insurance solution. The project is on; we are fine-tuning it. So, by the end of this financial year, we will be completely on a digital platform. Our IT partner is HCL Technologies. Our major drivers of growth have been health and motor insurance.
How big is the concern of underwriting losses for NIC?
The entire insurance sector has been making underwriting losses. Our major profit comes from investments. There has been some increase in premium in third-party motor insurance. This year, the increase is 20-30 per cent, which is good. We hope there would be more level-playing field in group health insurance and large property business. There is heavy discounting in large property insurance, owing to heavy competition.
How has been the reinsurance market this year?
The reinsurance market continues to be soft. Prices have not gone up. They have not gone down either. So, most companies have been able to either renew at the same level or get some marginal discount.
Are you planning to launch any new products soon?
We are filing some new products with health and motor, with additional valuations. We are also planning to launch higher-value health insurance and more features in motor policies. We would also like to look at the credit insurance market. The market has a few players and it is picking up.
| Financial Performance of National Insurance Company in 2014-15 fiscal (in Rs crore) |
| Net Profit: 1,196.74 |
| Underwriting Loss : 1,462.62 |
| Gross Premium Collection: 11,282.64 |
| Net Worth :12,529 (Market Value) |
| Solvency Ratio: 1.52 |
| Combined Ratio: 114.79 |
| Investible income : 25,221 (Market Value) |
