With a capital infusion of Rs 400 crore and plans to infuse another Rs 250 crore over the next two years, Bharti AXA General Insurance expects revenue to grow by 70% in the coming year. In an interview with FE’s Debojyoti Ghosh, managing director & chief executive Amarnath Ananthanarayanan shares the company?s strategy to enter new markets and double the number of policies sold in 2010-11. Excerpts:

What is the potential of the general insurance market in India?

The general insurance market is currently estimated at about Rs 35,000 crore gross written premium (GWP) and is growing rapidly. The low penetration levels of 0.6% of the GDP presents an opportunity for general insurers to increase penetration. We witnessed rapid growth of select product lines such as health insurance, where the premiums have grown by over 600% since 2002 growing from Rs 1,000 crore of GWP to Rs 6,600 crore in 2008-09. Potential also lies in the development of microinsurance for rural and semi urban markets, where the insurance penetration is about 2-3%. The United Nations Development Programme (UNDP), in a study conducted in India in 2007, had put the micro insurance at 1$.9 billion.

What kind of growth do you foresee in such a market?

We have achieved Rs 320 crore of GWP in the financial year 2009-10, becoming one of the fastest growing to achieve this milestone in the first full financial year of operations.

We plan to grow our revenue by 70% in the coming year and our focus will be on retail and rural lines of business. We are also planning to increase our points of presence to 125 locations in the coming year and will be scaling up locations we are already present in. Our manpower will grow to 1,800 from the current 1,100 and so will our cashless facility network of motor garages and hospitals. We intend to ramp up agents? base from 2,500 to over 4,000 by the end of this fiscal.

What kind of business are you seeing from the rural market? How do you plan to expand the rural market share?

Currently, 8% of our revenue come from the rural and micro business. We are planning to grow this to 20% in the financial year 2010-11. We are looking at tying up with rural institutions across the country and are interacting with a host of microfinance institutions and NGO?s who have been actively involved in the field of distributing insurance products in rural India. We have already tied up with 17 such rural institutions.

How do you plan to tap into the retail market? What will be your distribution channel?

Our main focus will be on our retail products like health, personal accident, motor, home and shop insurance, which currently account for about 60% of our premiums. The educational institutions and SMEs are also markets we are concentrating on. We are strongly looking at expanding our presence in the tier II, III and IV cities through tie up with NGOs, self help group and participation in government schemes.

We plan to rationalise our distribution channel by focusing on small shops and borrowed distribution. Innovative low cost distribution and servicing strategies to develop wider customer base.