The National Insurance Company (NIC) is set to re-enter the credit insurance market soon. According to N.S.R. Chandraprasad, Chairman and Managing Director, the company has already received the nod from the Insurance Regulatory and Development Authority (IRDA) for introduction of a credit insurance product.
The state-owned insurer has tied up with France-headquartered Tinubu Square for technical know-how.
Credit insurance is offered to business houses that sell on credit terms in the domestic and export markets. The insurance cover is aimed at protecting the business house against non-payment following a customer’s insolvency or default.
“We have partnered with Tinubu Square, which is into credit insurance globally, for technical know-how. We hope to roll out the product in the next few months,” Chandraprasad told
NIC earlier had a credit insurance product; however, it did not take off too well with the insurer garnering business only worth Rs 2-3 crore a year.
This product was later completely phased out when the IRDA banned the sale of any form of credit insurance in 2010 following huge claims on a cover granted by the state-owned Oriental Insurance to Paramount Airways.
“We now plan to tap the credit insurance segment through the introduction of this scheme, which is based on the fresh guidelines issued by IRDA, in a more focused manner. We will cater to the domestic as well as exports market through this product,” he said.
The company aims to undertake a big marketing exercise with a view to garner close to Rs 50 crore worth business in the first year of the roll out of the product.
The company is also in the process of training its manpower for issuing credit insurance.
Liability insurance
This apart, NIC also plans to launch liability insurance product. Liability insurance covers claims arising out of professional negligence. “There is an emerging demand for such products in India. We have applied to IRDA seeking their approval for the product,” he said.