Private general insurance company Future Generali India Insurance is targeting 20 per cent premium growth in FY15. The company, which achieved break-even in its sixth year of operations, is expanding its geographical reach by setting up small offices across the country.
K G Krishnamoorthy Rao, managing director and CEO of Future Generali India Insurance, said the non-life industry would grow 12-15 per cent in FY15. “We need to grow much more than the industry according to our plan, and hence, expect to see 20 per cent plus premium growth in this financial year.”
Future Generali India Insurance posted a profit of Rs 39.62 crore in FY14, against a loss of Rs 19.70 crore in the previous financial year.
The gross written premium for the year saw a 13 per cent rise to Rs 1,303 crore against Rs 1,151 crore in the previous year. The company had an operating loss of Rs 8.4 lakh and a combined ratio of 108 per cent. Combined ratio below 100 per cent indicates a company is making underwriting profits. However, even large public-sector insurers have posted combined ratios above 100 per cent, due to losses in health and motor third-party segment.
Rao said that they had opened 30 small offices across India in FY14 with two people in each office, which was attached to a branch. According to him, this would contribute a small amount of business and help get a geographical spread.
“The company had a plan to break-even in FY14 and had to manage both top-line growth and doing profitable business, along with bringing down costs,” said Rao. This, he said, was at a time when segments such as group health witnessed a decline in growth.
In April, more than a year after L&T General Insurance and Future Generali India Insurance announced a joint venture combining their businesses, Larsen & Toubro Limited (L&T) said both the sides have decided to call off the venture.
Sources said this was due to valuation issues.
In March 2013, L&T, Future Group and Generali Group had signed a non-binding term sheet for the merger of L&T General Insurance and Future Generali India Insurance. This was a first-of-its kind merger which was proposed in the insurance industry.
Following the merger, L&T was to hold a 51 per cent stake, Generali Group 26 per cent and the remaining - 23 per cent - was to be held by Future Group. This was subject to due diligence from the parties, apart from approvals from the insurance regulator and other bodies.
However, Rao said there has not been any impact of the deal being called off. “Though discussions were going on between shareholders, we went ahead with whatever plan we had as a company. We did not change our business plan or strategy. If the JV had gone through, we would have had to make some changes,” he added.
During FY14, Future Generali India Insurance expanded its micro-insurance services by tying up with micro-finance institutions and non-governmental organisations. Further, it also entered the weather insurance business, which it is looking to expand in the current financial year.