Tata Tea To Shut Insurance Agency Services

Tata Tea is in the process of closing down its insurance agency services under the umbrella of its division, Tata Marine Agencies.

The move is in keeping with the company's strategy to conform to the statutory regulations stipulated by the Insurance and Regulatory Development Authority (Irda), said Homi R Khusrokhan, managing director, Tata Tea. The company has introduced voluntary retirement scheme (VRS) for the 60 employees of the division.

Under the corporate agency norms of Irda, the directors on the company board from non-insurance background would have to undergo a 100-hour training. However, it may be mentioned that the corporate agency norm is still pending with the government for approval.

 

Moreover, as the insurance agency business was being run by Tata Tea as an agency of Llyod's, the division could not be hived off into a separate company either. Tata Marine Agencies has been agents of Lloyd's for more than 130 years.

The division also represented The Institute of London Underwriters, the Salvage Association, London, and some 200 foreign insurance companies including CIGNA of the US and most leading insurance companies in Japan, such as Mitsui, Tokio, Sumitomo, Yasuda, and also from other countries.

Tata Marine's branches were spread over major ports and cities in India and Nepal. Ship surveys, cargo surveys, claims settlements, recoveries, general average, non-marine services, pre-shipment surveys, mediclaims and investigations were some of the activities of Tata Marine Agencies.

Commenting on the tea industry, Khusrokhan said, "Though prices have increased over last year, the increase has been marginal at around Rs 6-7. The future course of action for Tata Tea in terms of spending would also depend on the price realisations."

The company at present is in the process of strategising the marketing initiatives of Tata Tea following increasing competition from cola firms and a depleting tea market. Several options, including launch of Tetley brands in the domestic market, are being weighed.

The Tata Tea scrip closed at Rs 183.55 on the Bombay Stock Exchange today and at Rs 184 on the National Stock Exchange.