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Bharti AXA Gen to change product mix to cut losses

The company, like other general insurance companies, is also said to be incurring significant losses.

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Bharti AXA Gen to change product mix to cut losses
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Bharti AXA General Insurance, the non-life insurance arm of the Bharti group, is working on a three-pronged strategy to cut losses. The company, like other general insurance companies, is also said to be incurring significant losses.

Amarnath Ananthanarayanan, Bharti AXA’s CEO and managing director, said, “The strategy includes changing product/revenue mix, adopting fraud detection measures, and building data that helps assess the risk and rightly price policies.”

According to Ananthanarayanan, the company expects its premium business to grow at least 60% next fiscal, he said they plan to bring down exposure to motor insurance to around 60% and the personal accident and health to around 20%. “The focus would shift significantly towards SME sector to around 20% from the existing 5%,” he said.

During the current fiscal, the total claims amounted to around Rs285 crore out of total premium business of around Rs600 crore. The cumulative losses, or net incurred claims, so far amounted to around 68% of the cumulative premium revenue of around Rs1,300 crore.

In a bid to ensure that the claims from the customer were brought down, the company has introduced risk management advisory and consultancy services for small and medium enterprises to emerge as India’s first and only insurer to do so.

Following the three-pronged strategy, the firm hopes that its losses, or claims ratio, will come down by at least 200 basis points to around 66% by next fiscal-end from the present 68%.
Keeping in view the losses and need for additional solvency amounts to meet increasing business, the company plans to infuse at least Rs200 crore of capital during the current
calendar year to the current capital of Rs550 crore. The company is also yet to rope in a bank as a partner and is said to be looking at Punjab National Bank for this.

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