Chennai: Earning more than half of its Rs262 crore premium income from the retail segment (Rs140.5 crore) the city-based Royal Sundaram Alliance Insurance Company continues its bet on the retail segment.

"We see a significant opportunity in the retail insurance segment. Over the next five years, retail will constitute two-thirds of our business from about 50 per cent today. This is more in line with the developments in the Indian economy than with the company's strategy," says managing director Antony Jacob.

He adds, "We also see encouraging prospects in the small and medium businesses category. In the past, a number of entrepreneurs took risks with protecting their assets."

Looking back on the years after opening up the general insurance sector for private players, Jacob predicts an extremely positive outlook for the industry as a whole.

"The general insurance industry valued around Rs16,000 crore now is growing at an annual rate of around 15 per cent. With increased awareness and education, the overall penetration of general insurance will increase significantly."

In line with its focus on expanding its retail business, Royal Sundaram has declared 2004 as the year of the customer.

Though insurance is a contract of promise - a promise to compensate the loss - Jacob becomes silent when queried about the numbers relating to the company's claims payout. However it is learnt that the company has posted an underwriting loss (excess of claims outgo over premium income). After taking into account the Rs18 crore investment income, Royal Sundaram joins the select club of private insurers to have posted a net profit last year. Excerpts

You have designated the current fiscal as 'the Year of the Customer'. What does this actually signify to the policyholder?
Customer service excellence is one of the major differentiators in India's highly competitive insurance market. Whilst customer retention and loyalty is built upon a complex combination of product delivery, pricing and the market environment, customer service plays a huge role in deciding whether a customer remains with an insurer or not. To reiterate the importance of service excellence, we have designated 2004-05 as the 'Year of the Customer'. Excellent customer service backed by first-class technology will be our prime area of focus during this year. This will steadily move the company on the path to achieving its vision of becoming the first choice general insurer for India.

What is unique about your human resource (HR) practices to win a HR award?
In January 2004 we won the "Deccan Herald Avenues HR Excellence Awards for the organisation with the most innovative HR Practices" for e-enabling our HR and administrative functions through our corporate people relationship management system (PRMS) tool. Launched in December 2002, this system provides a forum for communication across geographies and organisational structures, besides being an effective knowledge-sharing tool.

Could you give us portfolio-wise premium earned?
Royal Sundaram has written Rs262 crore of premium income during the financial year ending March 31, 2004, recording a growth rate of 40 per cent over the previous financial year's premium of Rs187 crore. Retail insurance accounted for Rs140.5 crore, whilst commercial insurance contributed Rs121.2 crore to the company's total premium income. Motor was the main contributor, accounting for 50 per cent of our total premium, followed by fire with 21 per cent, personal accident with 8 per cent, engineering with 7 per cent and health and marine with 6 per cent and 5 per cent respectively. The business generated from insuring the Sundaram group companies was around Rs10 crore. The company recorded a profit of Rs 8 crore.

Did the change in commission / brokerage structure announced by the Insurance Regulatory and Development Authority (IRDA) sometime ago affect your company in procuring business during March? March / April is the time when most of the corporate policies come up for renewal?
As the revised remuneration structure for intermediaries announced by the IRDA was with effect from April 1, 2004, it has not had an effect on the renewal of our corporate policies in the financial year ending March 31, 2004.

Could you tell us about your reinsurance programme?
Our reinsurance strategy is geared to maximising local retention and at the same time providing adequate protection for our range of portfolios. We work closely with the General Insurance Corporation (GIC) and have in place a reinsurance programme backed by major global reinsurers.

Did the company get any additional capital infusion last year?
There has been no fresh capital infusion in 2003-04. As of now, there are no plans to increase the capital base. The company had an initial capital of Rs101 crore which was increased to Rs130 crore in September 2001.

On your plans to expanding your network…
Currently, we have over 390 people working from 29 branches in 24 cities. We plan to increase the number of employees by around 100, in addition to opening around 5 more branches in 2004-05.