In a bid to face post-detariffing competition in the Rs 25,000-crore general insurance market, the four state-run general insurance companies have roped in two international consultants. While New India Assurance along with Oriental Insurance and United India have selected Boston Consulting Group, Kolkata-based National Insurance has gone for PricewaterhouseCoopers.
According to New India Assurance chairman and managing director B Chakrabarti, Boston Consulting Group has been selected on the basis of its expertise to give guidance on a host of issues, including getting a long-term view about the economy and general insurance market till 2020 besides human resource issues.
?The consultant has been mandated to suggest strategies to retain our leadership in the domestic general insurance market,? he added. The consultants will be actively involved in the implementation of the strategies over one year.
The finance ministry had asked the four public sector non-life insurance companies to appoint a consulting firm, so that they can reposition themselves in the light of increasing competition from private insurers.
Public sector non-life insurance companies have been steadily losing market share in the past few years. In 2006-07, their share dropped to 65%, against 73% in the previous year. There are now 30 insurance companies in the market, of which 14 are in the general insurance business.
Meanwhile, the net profit of the New India Assurance company doubled from Rs 716.38 crore to Rs 1,459.95 crore in 2006-07. Chakrabarti said the underwriting losses of the company fell from Rs 1,199.32 crore to Rs 653.27 crore during the year.
Almost 50% of the investment income has been generated from equity market in the days of surging Sensex, said Chakrabarti.