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Tata AIG to Double its Exposure in Health Insurance
- DetailsWritten by PolicyBazaar -
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Modified 08 July 2014
Tata AIG General Insurance Co Ltd, a joint venture between Tata Group and American International Group Inc (AIG), is planning to focus on health care by recruiting 3000 more agents and doubling its portfolio in health sector. Kaushal K Mishra, CEO and Managing Director of Tata AIG believes that health insurance might not be a loss making segment, if the insurance companies carefully consider the health condition of an individual and does not offer unviable premium rates in case of group insurance.
Talking about the performance of industry, he said that the company was growing on a good pace of about 15-20 % since 2010, but in 2013-14 the percentage descended to 12%. The slowdown brought the tough phase. They are expecting that the industry might regain its growth momentum from the October-December quarter. Kaushal believe that the auto sector is likely to offer good returns in the coming time and the health sector is sure to gear up if the government offers tax benefits to individuals on health premiums
When asked about the target for the present year, Kaushal told that last year the gross premium collection was Rs. 2,456 crore and the underwriting profits for last two years. Now, with major focus on health sector, the company is targeting at least Rs. 3,030 crore. The reason for concentrating on health is the company’s smaller portfolio i.e. of about less than 5% of the gross premium.
CEO believes that although health sector has not been offering good returns still the company wishes to double its exposure as it thinks that genuine premium rates can help any industry grow better and it considers Star Health as a classic example for understanding the growth in health sector. Talking about the industry experience, he said that one group insurance can never flourish at uneconomical rates. Thus, the company has avoided group insurance and RSBY (Rashtriya Swasthya Bima Yojana) because these are not economically feasible.
He informed that 40% of the gross premium is received from auto sector. The company does not have a very vast exposure in auto and is not even willing to go for the same. The company has a limited bandwidth and needs to use it judiciously.
Discussing the company’s growth strategy, Kaushal K Mishra informed that the company is planning to open 20 more branches to reach the count of 100 by October. His main focus is to reach the unaware small cities where the business of health insurance could flourish. He is also interested in increasing the number of agents from 7000 to 10000.
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