Venkatachari Jagannathan talks to SV Samant of HDFC Chubb Insurance|
"Four years after opening up the non life-sector for private competition, the market, I think, is now stabilising with strength areas of both the public and the private players getting demarcated," says Shrirang V Samant, CEO, HDFC Chubb General Insurance Company Limited.
According to him the market is gearing up for product offerings and customer service while the motor insurance segment registered the highest growth rate for the industry as a whole as well as for HDFC Chubb.
For the year ended March 31, 2004, HDFC Chubb has earned a gross premium of Rs112.95 crore and after taking into account the reinsurance cession (Rs28.49 crore) and acceptance (Rs4.21 crore) the net premium of Rs88.67 crore earned by the company.
"We earned Rs 107.99 crore from motor insurance while the balance was contributed by fire insurance (Rs36 lakh), marine (Rs20,000) and Miscellaneous (Rs4.58 crore)," Samant gives the breakup.
The company was the industry's biggest growth achiever last year - logging over 1,000 per cent growth. However, last fiscal was the first full year of operations and the base on which the growth was achieved is very low.
When queried about the channel-wise business break up, Samant says, "Our main business is motor insurance where the channels are equally divided between dealership and direct sales agents. For our non-motor business we are approaching the market through brokers."
The company has attracted Hyundai Motors's dealers, who issue policies for the cars sold by them and enables the company to control over the kind of vehicles it insures. This is because, car owners are more careful drivers, than heavy vehicle drivers. To expand into this segment, the company will shortly open branches in all major cities this year.
Unlike other private insurers, the business generated from group companies forms a very insignificant portion for HDFC Chubb General Insurance. Similarly unlike many of his counterparts, Samant does not try to hold back on numbers. Excerpts
What were your underwriting results in each business segment? How do you plan to reduce the underwriting losses (if any)?
Our underwriting results are in line with our expectations. As a corporate policy we exercise strict underwriting control which ensures that the loss ratio remains sustainable.
What was your total claim outgo last year?
Our claims pay out last year was approximately 54 per cent of the earned premium. It is premature to give portfolio-wise claims pay out figures since our main business was motor. So the majority of losses have come from motor, which is in line with our expectations. Our main loss control measure is strict supervision and timely settlement of claims.
What is your investment philosophy and how much did the company earn from its investments?
Our investment philosophy is to optimise investment return while conserving the capital. Our idea is to have the investment income as an additional cushion while making an underwriting profit. Last year we earned Rs12.45 crore from investments, totalling Rs153.86 crore with a yield rate of 5.5 per cent. Investment in government securities amounted to Rs91.11 crore while in debt it was Rs62.75 crore. The target for this year is Rs11 crore and the current yield rate is 5.12 per cent.
Do you have any plans to increase the capital base?
Our capital base is Rs120 crore. Last fiscal there was an infusion of Rs19 crore. We don't plan to infuse any additional capital this fiscal.
Could you tell us about your reinsurance programme?
Our reinsurance programme is geared towards managing our single risk and catastrophe loss exposure. The reinsurance is done with General Insurance Corporation of India.