Tata AIG Promoters to Pump in Rs. 200cr in 2019
Mumbai: Promoters of Tata AIG have committed an additional Rs 200 crore to the non-life insurer this year. Tata AIG had recorded the highest growth rate of 41% among large insurance companies last year and moved up to the number four slot with a 4.6% market share of the non-life market, which has 33 general and specialised insurers.
“A significant part of the capital infusion will go towards investment in IT. We will be increasing automation, eliminating paper and having deeper integration with distribution channels,” said MD & CEO Neelesh Garg.
The private insurer also plans to move health management in-house from third-party administrators and work is already in progress at its health management centre in Hyderabad.
The company had a paid-up capital of Rs 907 crore and reserves of Rs 1,094 crore as on March 31, 2019. It recently expanded its distribution network through new bank partners, which include Axis Bank, Bank of Baroda, Canara Bank, IndusInd Bank, IDBI Bank, Federal Bank and United Bank.
“We are already quite integrated with the branches of banks that are our corporate agents. For instance, it is now possible for a bank to offer an SME client a premium quote across the counter and instantly issue the policy. Group Personal Accident and Workmen’s Compensation policies are issued at the bank branch itself,” said Garg.
Tata AIG expects some moderation in industry growth rate to low double digits this year because of the slowdown in auto sales, coupled with the slowdown in lending by NBFCs. To expand the market, the company is promoting new-age insurance products like domestic travel, wallet protection and cyber cover.
According to Garg, the focus of insurance is shifting from covering tangible risks to intangible ones. “For instance, in the case of loss of wallet, more than the currency it is the risk of losing cards and documents that is a bigger risk,” he added. “Now, in addition to financial protection, customers are seeing value in the support services provided by insurance company. For instance, we have positive feedback from customers for the lost passport assistance when they are travelling abroad,” said Garg.
“On health side, we are looking at expanding the market by including cover such as OPD products. Over two-thirds of spends on healthcare is on out-patients, while the rest lies in in-patient,” said Garg. The other factor going in favour of health policies with out-patient care was that customers feel that they are getting advantage of the service even when there is no hospitalisation. “Traditionally, the problem in this segment has been verifying the claims. But now, there are provider networks in place which is enabling such products,” said Garg.