Reliance General Insurance swings to profit in Q3
New Delhi: Helped by improved pricing and an expanded agent base, leading private sector non-life insurer Reliance General Insurance Company (RGIC) has posted a profit of Rs 16 crore for the quarter ended December 31, 2012, as against a loss of Rs 34 crore in the year-ago period.
The company has swung back into profit after 16 quarters on the back of sourcing of quality business, better pricing of insurance products in the motor and health segments and enhanced retail agent force. It had last reported a profit of Rs one crore in the April-June quarter of 2009.
Reliance General Insurance, which offers auto, health, property, travel, marine and commercial insurance products among others, is a part of Anil Ambani-led Reliance Group's financial services arm Reliance Capital Ltd.
During the quarter ended December 31, 2012, Reliance General Insurance saw its gross written premium grow by 21 percent to Rs 503 crore, its parent firm Reliance Capital said, while announcing its quarterly results.
"A change in the business mix, optimum use of technology across all operations and functions to manage cost, important corporate business and expansion of retail agents helped the company make a turnaround almost after four years," Reliance General Insurance CEO Rakesh Jain told PTI.
"A decline in claim ratios and better pricing of insurance products in the motor and health segments are also instrumental in achieving profitability. Going forward, we aim to show further improvement in profitability," he added.
The company had recorded a loss of Rs 105 crore in the previous quarter ended September 30, 2012, as it had to make one-off provisions for the industry wide third-party motor insurance pool and strengthen its own reserve for meeting motor vehicle insurance claims.
RGIC has tweaked its business mix as it has started moving away from total dependence on motor.
"We aim to bring down motor segment to about 60-62 percent from the current 65 percent and expect to continue health at about 15 percent. The rest will be commercial lines, fire and engineering, which are more profitable and we are trying to grow that portfolio," Jain said.
The investment book of Reliance General rose by 37 percent to Rs 3,255 crore as on December 31, 2012, while the total capital invested in the business is Rs 1,747 crore.
The company has a distribution network of 126 branches and over 9,900 intermediaries and a private sector market share of 7 percent, in terms of gross written premium, of the Indian private sector general insurance industry.
Reliance Capital is looking to induct a strategic partner in its general insurance business during the next financial year, following a possible sale of a 26 percent stake in Reliance General Insurance.