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Iffco-Tokio General to focus on fire, marine insurance

Our Bureau

NEW DELHI, May 9

IFFCO-TOKIO General Insurance Ltd, the company proposed to be set up by Indian Farmers Fertiliser Cooperative Ltd (Iffco) with Tokio Marine and Fire Insurance Company Ltd, will focus on fire, marine and automobile insurance, apart from offering innovativ ely packaged products for the fertiliser industry and crop and farmers' credit insurance.

The Iffco Managing Director, Mr. U. S. Awasti, told newspersons here, ``We are waiting for the Insurance Regulatory and Development Authority (IRDA) to come out with its rules and regulations by the month-end. We will register our joint venture company b y June 15, after which we will formally apply with the IRDA for a licence. If things proceed on schedule, we will start operations by Diwali time, towards October.''

Mr. Awasti said that Iffco would provide all the ``legwork support'' to the general insurance venture by virtue of its extensive 35,000-member co-operative societies network, which reaches out to over 40 million individual farmer-members across the count ry. ``These member-cooperatives will be developed as agents for distributing our insurance products,'' he added.

On its part, Tokio Marine -- which is the world's fifth largest general insurance company with net premiums written of $10.66 billions in 1999 and part of the Mitsubishi Group -- will provide the entire software for the venture in terms of the p roducts to be developed, risk management, underwriting and re-insurance support.

Mr. Awasti admitted that the development of rural insurance products will take time, ``as it would take us some time to understand the intricacies of the business, particularly assessing the degree of risks involved.''

Towards this end, Iffco is in talks with the Indian Space Research Organisation (ISRO) to device advanced geographical information system packages, which will aid in ascertaining the risks and extent of crop damage.

``We envisage good returns for our investment in this venture, especially when there is an opportunity to offload a part of our 74 per cent stake through an initial public offering,'' he added.

Iffco's networth as on March 31, 2000, stood at Rs. 2,350 crores, with its net profit amounting to Rs. 325 crores on a turnover of Rs. 4,700 crores (provisional).

The Senior Managing Director of Tokio Marine, Mr. Mizuto Shiozawa, said his company operates in 41 countries world-wide. ``Wherever we go, we first look for providing insurance services to the existing Japanese corporates in that particular market. We ho pe to do the same through the proposed joint venture in India. I have already spoken to leading Japanese corporates here including Suzuki, Honda and Toyota, for servicing their requirements,'' he told Business Line.

Tokio Marine is, in fact, currently the largest treaty reinsurer in the Indian market, with its premium income from reinsurance exceeding Rs. 30 crores annually. ``Besides servicing Japanese commercial interests here, we also look forward to the opportun ities provided by the domestic market. Given Iffco's huge network, we are confident of developing suitable insurance products for the rural areas once the venture takes root,'' he added.