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Interview of Vijay Pawar, President,
Reliance General Insurance Company Limited
Majority of the insurers have entered into tie-ups with
international insurers while yours is the only company to
go solo. What according to you will be your advantage as also
your disadvantage?
We believe that we have the domain expertise and the knowledge
of the Indian market. Technology can be sourced through technical
tie-ups. It is a matter of perception and the group philosophy
has been to go the tie-up route rather than a joint venture.
We believe that the Indian market environment is substantially
different from the developed market and the psyche of the
Indian customer demands a thorough understanding of the dynamics
of the market. This goes to our advantage.
Also most non-life companies are able to write volume
businesses through technical support of their foreign principals.
With lack of such technical support how easy will beating
competition be?
The group profile and the huge database in terms of shareholders
alone and the prospective retail foray in Telephony and Petroleum
products will provide access to a customer database which
will be very hard for any competitor to match. We are confident
that Reliance General Insurance Company (RGIC) has an unbeatable
advantage in the retail segment. Volume business is essentially
technology driven.
The group’s expertise and reach in the areas of connectivity
and web related technology will be available to RGIC. The
vision of the promoters is to create an end-to-end e-enabled
insurance enterprise. The changing environment in this age
of ‘Webolution’ will require different set of skills in the
areas of product design, marketing, business processes and
customer servicing. These skill-sets can be sourced through
specialists and our competitors will have to do the same since
globally, the insurance industry has been slow in adapting
to the changing technology unlike the banking and financial
sectors. At the same time we have the advantage of a national
footprint in terms of connectivity and it’s related services.
Competition is always welcome and will only spur us on to
bettering the best.
Why according to you has the motor sector been a loss-making
portfolio. What kind of changes, in your opinion will make
it a profitable one?
Motor portfolio has been the bane of the industry worldwide.
In India the tariffs are very low compared to world standards.
The rating needs to be revamped in the light of the existing
claims outgo of the industry and needs to be related to issues
like the age of the driver, claims history of the driver,
make of vehicle etc. The poor infrastructure, lack of training
to drivers, proliferation of road-side garages, absence of
a central database for licensing and statistical purposes
also make it very difficult to control and monitor this portfolio.
These issues will have to be resolved for any significant
impact on the portfolio.
What kind of changes will the soon-to-happen de-tariffing
of the motor sector bring?
Detariffing will allow the market to find it’s own level
and will reward the good risks while penalizing the loss producers.
What is your product USP?
At present our strategy is to concentrate on the corporate
sector. We are in the process of setting up our infrastructure
to service the retail segment. Motor and health would be a
part of our retail foray. The products on offer are the standard
tariff products and we have approval for 55 products from
the IRDA at the moment. We believe that the right time to
introduce innovative products in the market will be once we
have set up the organization and systems required to deliver
a different experience to the customer. The initial phase
is to test the market and put in place processes to suit the
customer interface. Innovation should not only be in terms
of product content but also in terms of customer satisfaction
through customized service. Since our retail foray is limited,
we have not tied up for distribution as yet. The relevant
business models are being worked out and will be in place
for the full-fledged retail foray. The attendant issues like
publicity etc will be in consonance with the retail strategy.
How much premium income did you garner last year and what
is your target for this fiscal?
We achieved a premium income of Rs.79 crores and settled
309 claims in the last fiscal. We have targeted a premium
income of Rs.200 crores this fiscal and have already achieved
Rs. 160 crores till December, 2002. Capital infusion will
be as per IRDA guidelines.
What is your market share?
With our limited operations we have a market share of approximately
18 percent of the market amongst the private players.
What is the biggest hurdle private non life insurers are
facing today?
The biggest hurdle for non-life players is the sheer size
of the market in terms of geographical spread and demographics.
Apart from product innovation, a good distribution strategy
will be the key to success for any new entrant.
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