Oriental Insurance Eyes 12% Growth In Premium Income

State-owned Oriental Insurance Company has set a growth target of about 12 per cent in premium income at around Rs 2,650 crore for 2002-03, against 10 per cent growth achieved during the last financial year.

The company's premium income during 2001-02 is estimated at around Rs 2,400 crore. "We expect 10-12 per cent growth in premium income this year also. It will be of the same order as was achieved in 2001-02," Ajit Mohan Sharan, officiating chairman and managing director, Oriental Insurance, and joint secretary in finance ministry, said today on the sidelines of a function to announce a tie-up with ICICI Infotech.

 

Oriental has a market share of 24 per cent in general insurance market at present and has around 1,000 branches spread across the country. The premium income earned by all the players, both private and PSUs, was around Rs 12,000 crore in the last fiscal, he said.

Sharan said motor insurance resulted in a loss of over Rs 1,300 crore on account of unjustifiable pricing. However, the new motor insurance scheme, which would come into force by July 1, is expected to peg premiums at more realistic levels, he added.

The new scheme was based on the recommendations made by the tariff advisory committee, which went into details of the motor insurance premium and studied the experiences of other countries, Sharan said.

Motor insurance rates could not be raised in the last few years owing to stiff resistance from the transport sector, especially truckers who went on a nation-wide strike whenever general insurers tried to raise the premium.

Predicting vast changes including product profiles and customer relation by insurance companies, he said these changes are expected over the next five years.