We may come out with IPO this fiscal, says G Srinivasan of New India Assurance

The government has given a go-ahead for the IPO for PSU general insurance companies. How prepared are you for the public offer? What is the roadmap ahead?

The government had announced in the Budget that insurance companies will be listed in the market. So we are in the process of taking a decision and it might happen in a few months, and hopefully we could be the first to hit the market. We will complete the process and would be ready in next few months. But market conditions will play a major role for the IPO.

Can we expect the IPO in 2016-17?

We might be ready by March 2017. But the timing depends on the market. So if the market is good and if the owners feel that it is the right time, then the listing can happen before March 2017.

What is the present book value and what would be the valuation?

The book value of property and assets would be around Rs 50,000 crore, but the real valuation needs to be done by experts. We are the only insurance company with a large base in India and overseas. We have a lot of inherent value. I don't want to speculate on the IPO valuation.

How has been the company's performance in the recent period, and how do you see growth in the insurance business in 2016-17?

The first quarter has been reasonably good; we have grown 17% and increased our market share. We have posted reasonable profit figures. The current financial year is very promising for the general insurance industry. With a lot of new opportunities like Pradhan Mantri Fasal Beema Yojna, premium in crop insurance has increased from Rs 4,000 crore to Rs 17,000 crore. Overall, the economic situation is looking positive and increase in insurance awareness means we will do more business. New India Assurance is looking at scaling up the business to Rs 21,000 crore in 2016-17, up from Rs 18,000 crore last year.

What is your company doing for increasing insurance penetration, especially in rural areas?

In the last few years, we have opened about 1,400 micro offices that are taking insurance to the people in rural areas. We are also focusing on increasing professional agents so that they can sell the personal line of business. On the whole, we are focusing on the retail segment in a big way like micro offices, agents, micro-insurance agents, engaging in common service centres; so all these could help us do a much bigger insurance penetration.

Is the new motor vehicle Act recently passed by government good for the insurance companies or will it create problem for them?

The motor third-party claims have been a big problem for the general insurance industry, which has lost thousands of crores in the last 20 years because of high motor third-party claims. We have been requesting the government that the motor vehicle Act should be properly amended so that there is a limit on liability, time limit in filing of the cases; and also the accidents on the road should be controlled. The traffic rules and regulations should be strengthened and be properly implemented.

What's your company's plan to increase online insurance business?

We see a lot of traction in the digital mode of buying policies. About 12% of the policies are sold electronically, and this will continue to increase. We have very sound and robust technology. We have come up with a lot of portals for customers, intermediaries, agents; so not only our customers can buy policies directly, our intermediaries are also able to leverage technology to issue policies. We feel that digital will be a very powerful way to sell policies.

How do you see your growth in overseas markets?

Around 18% of business comes from overseas markets. The UK market has been the largest, where we have been operating for the last 96 years. Last year, we grew 15% in our international business. We are looking for new markets; we started operations in Myanmar, opened an office in Guyana and are entering Dubai. We are also expanding in other overseas markets.