Bharti AXA to go for Rs 200-crore infusion this year

Bharti AXA General Insurance, a 74:26 joint venture between Bharti Enterprises and the French-headquartered AXA Group, plans to go in for an infusion of Rs 200 crore by the end of this calendar year, adding to its current capital base of Rs 550 crore. So far this financial year, it has infused Rs 90 crore.

Additionally, it is planning to rope in a bank, preferably a public sector one, as its third partner and is contending partnership with Punjab National Bank (PNB), according to CEO & MD Amarnath Ananthanarayanan.

The company was awaiting decision on the application made in response to a tender floated by PNB, calling for prospective partners in the insurance sector, he said.

Ananthanarayanan was here to announce the company’s new market development initiative for the small and medium enterprises (SME) sector, offering risk management advisory and consultancy studies.

At a nominal fee, it would provide fire, electrical and general safety audits, post-loss survey and risk inspection, among others. These would help mitigate and prevent losses from unforeseen events and were particularly relevant for SMEs, given their single promoter status, he said. “Being the largest lenders to SMEs, public sector banks fit in with our own strategy of tapping the sector,” he told reporters.

The SME sector accounts for five per cent of the company’s business. However, it plans to raise this 20 per cent this year. The rest comes from motor insurance (60 per cent) and health and personal accident policies (20 per cent).

The insurer, with a revenue of Rs 600 crore this financial year through sale of 500,000 policies, has paid 100,000 claims worth Rs 285 crore. Ananthanarayanan said up to 65 per cent of the capital was going into statutory reserves, with 33 per cent being spent on expansion.

Its loss ratio — 68 per cent in 2010 — is expected to drop to 66 per cent in 2011. The company would consider stabilising it once it reached a revenue level of Rs 1,000 crore, he said. In 2011, the company expects 60 per cent growth in revenues, as against Rs 500 crore in 2010.