Royal Sundaram Alliance to increase presence in health, commercial insurance

The company plans these businesses to have a better share in the GWP of Rs 4,000 crore expected by 2020

Royal Sundaram Alliance Insurance Company Ltd, a subsidiary of Sundaram Finance, will be increasing its focus on health and commercial insurance business in the next five years, changing its business mix from the current situation in which motor insurance dominates the Gross Written Premium (GWP) of Rs 1569 crore.

M S Sreedhar, managing director of Royal Sundaram Alliance, who took charge after Sundaram Finance increased its stake to 75.9% by acquiring the 26% stake of Royal & Sun Alliance Insurance PLC in the insurance firm earlier this year, said, "Currently, motor, which consists of 74% of our business, is the bread and butter of the company. We will be increasing our business in commerce and health while the motor insurance business will continue to grow."

 

The company is expecting its GWP to grow to Rs 4,000 crore by 2020. In five years from now, the health insurance business, which is currently around 10-11% of the total business with Rs 150 crore, would grow to 25% of the business, at around Rs 600-700 crore. The commercial insurance business would also grow from the current around 11%, which is around Rs 200 crore, to 20-25% of the business at around Rs 600-700 crore. The presence of motor, while it continue to grow, in the business mix would be around 50% of the total business, in five years, he added.

The company currently has around 5.2 million customers, which is down from around seven million customers in 2013-14, as the Rashtriya Swasthya Bhima Yojana (RSBY) is expected to undergo a change with the centre's new health policy in the making. It had presence in around six to seven States under the scheme and in the last five years, it had a business of around Rs 230 crore from the scheme, he added.

He added that the insurance sector is expected to see an increase in prices as the downward trend in prices are expected to see a change in near future. The company would be launching two new health products and a product for home and home contents, where the insurance penetration at present is very less. It is expecting the GWP to grow at the same rate of industry growth and to be over Rs 1,700 crore during 2015-16.

The company is looking at options to change the name after the foreign partner's exit, though nothing has been decided on it. However, at this point, the company is not looking at any partner, he added.