Hdfc Plans To Tap Client-Base For General Risk Line

Housing Finance Development Corporation (HDFC) today announced that its joint venture general insurance company, with US-based Chubb Corporation, would have an initial equity of Rs 100 crore, with the foreign partner holding 26 per cent stake and the remaining to be held by the Indian housing finance major.

"We will approach the Insurance Regulatory and Development Authority with an R1 (initial application for registration) application," HDFC chairman and CEO Deepak Parekh said at a press conference announcing the tie-up.

He said that HDFC and HDFC Bank together have a huge captive market to sell insurance policies.

"A recent study revealed that nearly 87 per cent of our customer base does not have a personal insurance cover and that provides us with a huge untapped market," he added.

"There is huge amount of captive potential and we are aiming to become the third-largest credible company in the world," Parekh said.

Chubb Corporation chief executive Dean O' Hare said the potential in India far exceeded than that in many other developing economies, including China where the company has presence.

The initial focus would be on offering personal insurance, including motor and household insurance and insurance in case of accident and disability.

"We will also think of high quality commercial insurance once the market gathers momentum," chief representative of HDFC-Chubb Shrirang V Samant said.

HDFC, already into the life insurance business, had on Wednesday approved 'in principle' the proposal to set up a joint venture for general insurance with Chubb.

Parekh said HDFC had assisted 1.8 million households through loans of over Rs 37,000 crore through its 110 branches in 83 cities in the country and they could form the base of the customers of insurance business. In addition, HDFC Bank has 1.9 million retail accounts.

Chubb is one of the largest property-casualty insurers in the United States with an asset base of over $25 billion at the end of December 2000 and has 130 offices in over 33 countries across North America, Europe, Latin America, Asia and Australia. Chubb has underwritten insurance worth over $6 billion during the nine month period-ended September 2001.