United India To Float Arm To Hawk Risk Products

Public sector non-life insurance major United India Insurance (UII) will float a separate subsidiary for marketing personal-line insurance products in the country. "We are at present selecting an advisor for the project", said chairman and managing director V Jaganathan.

The subsidiary will primarily sell products like mediclaim, household policies and personal accident policies. The subsidiary will come up a series of comprehensive household policies covering every aspect of the household in personal-lines, said Jaganathan.

The holding pattern of the new company is yet to be decided for it could be a wholly owned subsidiary of UII, or a joint venture collaboration with either an Indian company or a foreign one. Although Jaganathan declined to comment on the capital structure of the new subsidiary, he said, UII already has drawn up a roadmap for the company.

Meanwhile, UII has already launched a comprehensive household policy that covers personal accident, household policies, and mediclaim. The company is also engaged in educating public over the needs of personal insurance products that has a very poor growth rate in India while the potential lies in this sector with a huge middle income and high income population. It expects to make a Rs 500 crore premium income through its personal-line products.

Meanwhile, UII has also focused on cattle insurance and has recruited many doctors to augment is cattle insurance marketing. The company expects to register a Rs 200 crore premium income in the current fiscal.

UII has registered a Rs 2,449 crore business last fiscal and expects to register a 15 per cent growth rate while the industry is growing at 12 per cent per annum. UII has also registered a Rs 465 crore investment income on an investment of Rs 4,000 crore.

With a fall in interest rates, the company has increased its exposure to mutuals and is going for liquid funds instead of call money. It has also invested 50 per cent of its investible funds in gilts, non-convertible debentures and has entered into consortium arrangement in long term development investments.