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New India backs laws to protect policyholders
New India Assurance is very supportive of T&T’s new Insurance Bill, with its chairman Gopalan Srinivasan saying he believes there is a need for good legislation that takes care of policyholders.
Srinivasan said the new legislation is going to ensure insurance companies are well capitalised, which is very important for financial institutions.
This is one of the setbacks, he said, T&T has been experiencing.
“T&T has a number of large companies in the insurance sector, but some of which are not adequately capitalised, which is a matter of concern.”
“Hence, we support the legislation and all the initiatives by the Government to ensure the industry meet global standards.”
Asked how they managed to weather the economic downturn locally and globally, Srinivasan said, “We have a consistent philosophy, which entails good insurance products, good underwriting practices and good customer service.”
New India Assurance is part of a growing insurance industry, in which more than 3,100 insurance intermediaries are registered with the Central Bank.
According to Carl Hiralal, Inspector of Financial Institutions at the Central Bank, said New India’s asset base has grown to $275 million at the end of 2012 and has annual premiums of more than $112 million.
“The company has a robust capital position of $107 million as of December 2011 and, therefore, is well positioned to meet the challenges ahead,” Hiralal said.
Both Srinivasan and Hiralal spoke to the Business Guardian at the January 23 formal opening of its new head offices at 6A Victoria Avenue, Port-of-Spain.
Srinivasan said the New India plans to use T&T as a base to spread its wings into such nearby markets as Grenada, Guyana and Suriname.
He said despite the challenges the financial sector faced in the last two years, New India is confident the T&T economy would return to its high end growth rates.
“Insurance penetration in T&T is very high and the new legislation would lead to some mergers and consolidations, where a number of players may come down in the domestic market. So there is a lot of space for well-capitalised companies like New India.”
Srinivasan said the company plans to offer new products.
“Being in the industry for 93 years and a major player globally, we plan to get into miscellaneous lines of businesses namely marine cargo insurance.”
He said New India’s focus in T&T has been on motor and property insurance, but would definitely embrace new lines of businesses as opportunities present themselves.
Providing a brief synopsis of the property side of its business, he said it has not been faring very well.
“We are seeing the rates dropping, so that is a matter of concern for us and there is also high amount of reinsurance involved, so we in the Caribbean have not made much profits out of property insurance.”
He said the low profits on property insurance is due to the Caribbean being perceived as exposed to catastrophies, like hurricane and earthquakes, resulting in a high reinsurance cost.
On the flip side, though, motor insurance has been faring well.
India’s liberation reforms
India’s insurance market was only opened up in 2000 with a large market size of about 27 players in the industry, Srinivasan said.
India, seen as the tenth largest in the world by nominal gross domestic product and third largest by purchasing power, only opened up its economy to free and liberalised international trade in the 1990s according to Wikipedia.
Regarding the liberalisation of the financial sector, Srinivasan said, “The banking sector always had foreign banks operating in India, but the insurance sector has been closed to competition for many years.”
He said there were only state-owned companies until 2000 but, by this year, the insurance sector was opened up.
“We are going forward as we see more companies come into the Indian market. The strengthening of the regulation happened along with opening up of the markets, so from day one, the companies would be well regulated.”
Still on its path to continued liberalisation, Srinivasan said the Indian government has in the last five years opened up its market to large retailers, namely US retailer Wal-Mart and British supermarket chain Tesco.
Srinivasan said while the smaller retailers are not comfortable with the idea as they feel threatened, Srinivasan added that India’s huge landscape creates room for everyone.
He said by allowing these large retailers to enter India, it would open up the Indian market for foreign direct investments, provide a proper and professional structure and ensure an appropriate supply chain mechanism.
Srinivasan said there are safeguards and regulations in place to protect smaller retailers from the larger ones.
“It would take sometime for the government to convince them, but we all see that it is something that is necessary and good for economy.”
About New India
New India began its operations in T&T on July 1, 1997. Prior to this, India’s Ruby General Insurance established an office in T&T in 1967, after which New India took over and the name changed to New India Assurance T&T Ltd.
In 1997 the company established full fledged branches in Port-of-Spain and San Fernando, and later set up agencies in Dominica, St Lucia and St Marteen.
Up until 2000, the company’s main line of business was motor insurance, but its portfolio has since included property insurance.
Hiralal said the company has been growing consistently and commended it for its conservative approach, which has brought success and consistent profitability in the last three years.
Hiralal attributed the company’s great performance and best practices to the board, which, he said, speaks to good governance, professional standards and the growth of a risk-adverse culture.
About Gopalan Srinivasan
Srinivasan is also managing director of New Assurance Company Ltd, Mumbai, India.
With more than 30 years in the insurance industry, Srinivasan said he began his career at New India Assurance.
He said he was the managing director in 2004, where he spent just over four years in T&T. He returned to India where he now heads the global company.
The 54-year-old insurance executive wears many hats and sits on several boards: India International Insurance, Singapore; Prestige Assurance PLC Nigeria; New India Assurance, T&T; GIC Housing Finance Ltd, India; and the National Insurance Academy, which deals with insurance education.
Srinivasan said he had a very successful career where he won several awards, among them is Skoch Financial Inclusion Award.
He joined New India Assurance as a management trainee at the age of 21. He was divisional manager, regional manager and general manager. Srinivasan was also managing director at the New india Assurance (T&T) Ltd,
“My vision was to be a top-notch insurance professional successfully running a global insurance company. I had the desire and passion to lead New India.”
Srinivasan is a fellow of Insurance Institute of India.
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