Kolkata-based National Insurance Company (NIC), which is among the three general insurance companies that are likely to be merged into a single entity, is working towards improving efficiency by focussing on faster settlement of claims and rationalising expenses. The general insurer, which has put its IPO plans on the back-burner following announcement of merger, is now looking for some support from government for recapitalising itself. In an exclusive interview with BusinessLine , Tajinder Mukherjee, Chairman and Managing Director, NIC, spoke about the way forward for the company. Excerpts:

Can you throw some light on the progress on the merger front? Has a consultant been appointed?

The process of appointing a consultant for merger has begun. The recommendations of the selection committee will be taken up for final selection. Probably within a year or fifteen months from now, we should see the correct picture emerging. Right now, I would say, the merger process is on track.

So, what is NIC doing in the run-up to the merger? Has it affected customer sentiments or employee morale?

It (talks of merger) has not affected customer sentiments or employee morale in a very perceptible way though there are undercurrents.

We need to see how the consulting agency chalks out manpower restructuring. When I meet my people I tell them there is no need to panic because we will be part of the largest insurance company in India. Till then, it is business as usual.

What would be the key focus areas for NIC, going forward?

We are focussing on bringing down our combined ratio, which is a combination of claims, expenses and acquisition costs. There is a lot of focus on managing claims better, faster claim settlement and expense rationalisation. We would also be working towards a more balanced portfolio mix.

How has the general insurance industry been growing so far this fiscal? Do you see the growth momentum continuing?

This year, overall industry growth appears to be less than that of last year. In the last two to three years growth has been good, riding mainly on a surge in crop insurance. But this year, crop insurance seems almost static for the industry; so growth figures may not be as attractive. Last year, the industry clocked a premium of ₹1.5 lakh crore. We may see around 15 per cent growth this year. I expect the double-digit growth to continue for the next couple of years for the general insurance industry in India.

How has 2018-19 been for NIC? How do you see the

next year panning out?

This year we have been de-growing till the second quarter because there is correction happening in some of our portfolios such as group health. Group health accounts for almost 50 per cent of our total health portfolio. We have been consciously trying to bring our exposure down; we are looking at repricing it to improve the performance. The pricing part is crucial in group health to ensure decent returns on portfolio.

Another setback has been on agriculture insurance. Being a tender-based business, it is unpredictable and can cause sudden spikes or dips. Last year we did around ₹1,500 crore under crop insurance, but this year it is close to ₹700 crore so far.

So, which are the businesses that you would be focussing on?

Currently, motor accounts for 40 per cent of our total portfolio and health 30 per cent. Moving forward, we would look at pushing non-motor personal line products such as householders’ insurance, shopkeepers’ insurance and travel insurance, among others, on the retail end.

For the corporates, our focus would be on the liability segment, including niche offerings such as cyber, and title.

When it comes to personal line of insurance like property, personal accident or insuring contents of the house, the level of awareness is very low in India.

Despite the disasters witnessed in recent incidents like the floods in Kerala and Chennai, people do not consider general insurance as a priority. We would try to work on creating awareness through our agency channel.

You had plans to go in for an IPO. What is happening on that front?

We had planned an IPO, but that is deferred for now. However, we are in talks with the government for capital infusion.

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