Iffco-Tokio to infuse Rs 120 cr capital

IFFCO-Tokio General Insurance Company (ITGI) will shortly be making an additional capital infusion to the tune of Rs 120 crore.

Ajit Narain, managing director and chief executive officer said, "We are currently working on additional capital requirement. It would be around Rs 120 crore." The additional capital was likely to be infused within the current financial year, he said.

M K Tandon, financial advisor, said, "We have set a high growth target for the year. In addition, there has been a large number of claims. Obviously there would be additional capital requirement."

The current capital base of the company was Rs 100 crore, noted Narain. Meanwhile, ITGI is expecting to record around 50 per cent increase in premium income this year.

"We are looking at total premium income of Rs 750 crore against last year's premium income of Rs 501 crore, with profit before tax at Rs 23.90 crore. As on November 2005, premium income has already touched the Rs 500-crore mark," Narain added.

The return on equity has been 23 per cent in 2004-05, Tandon added. In spite of several hits in the current fiscal, the bottomline would not be severely affected, assured Narain.

"Even in worst possible case, ITGI might have to take a burden of around Rs 15-20 crore on profit. But the actual burden would be much lower. Consequently, the net bottomline would not be affected in severe way," said Narain.

A Sen Sarma, executive vice-president, ITGI informed that the number of claims are likely to touch 72,000 in 2005-06. Last year, the corresponding figure was 67,458. It would now be focusing on retail segment to boost its business, noted Narain.

"Currently, retail and commercial segment contributes equally to our total business. We would try to increase the retail segment's share and gradually, make it 60 per cent in next five years," he added.

In the short run, the company would set its focus on the SME sector, he added. The company might also come up with tailor-made products, including one addressing the excessive rainfall and temperature uncertainty, mentioned Sen Sarma.

"We would be coming up with several tailor-made packages as per the requirement of a section of customers," he assured.

In a parallel development, Tokyo Marine Nichido, the 24 per cent stake-holder in ITGI, is exploring opportunities to enter the life insurance segment in India, said Tandon.

He further noted that the company is talking to several Indian companies in this regard.