United India Insurance Company Ltd. has decided to go in for rationalisation of product pricing to improve profitability, according to a top official.
“Our thrust will be on charging appropriate rates for our products,’’ United India Chairman-cum-Managing Director A. Hoda said in an interview here on Thursday.
Mr. Hoda said price rationalisation was a part of an exercise to beef up the profitability of the insurer.
A combination of factors such as wage arrears-related outgo and losses due to unprecedented floods in Chennai late last year had seen its profit after tax slip to Rs.221 crore in 2015-16 from Rs.300 crore in the year-earlier period.
Right pricingMr. Hoda said the focus this year would be on improving both the bottom and top lines. He asserted that right pricing of assorted risks was a key to this objective.
The insurer, he said, was also planning to make a foray into products for the agricultural sector even as it stepped up its focus on personal line business. All these initiatives would help considerably increase the bottom line of the company, he said.
The company had set itself a gross premium target of Rs.14,444 crore this year. The insurer wrote a gross premium of Rs.12,250 crore in 2015-16.
Mr. Hoda said property and marine insurance had been dwindling in importance. Though they continued to grow in absolute numbers, they had been declining in relative terms.
Consequently, the company, he said, was giving a big push to retail segment comprising motor and health insurance.
A host of factors – ranging from high cost of treatment to the increasing propensity of corporates to offer health cover to attract talent – had seen health insurance practices in India aligning with those in western countries, he said.
Going digitalWith the market dynamics changing fast and modern youth driven by technology, he felt the public sector insurer had to quickly go the digital way.
According to him, online sales fetched less than Rs.100 crore in premium for the company last year.
The company was working to plug this gap by offering an end-to-end online solution. A pilot was on already in Chennai, he said.
A complete roll-out could happen in a few months, he said. He felt that digitisation would help the public sector insurer bring in more customers, save in distribution cost and offer low-premium products in segments that were hitherto untapped.
Mr. Hoda said the company was also in the midst of an exercise to improve its brand equity.
The objective was to increase the overall visibility of the company, he added.
