Royal Sundaram Alliance Insurance Company Limited, which announced its annual results for 2006-07, registered a 168 per cent growth in Profit Before Tax for the financial year ended March 2007. This performance, based on a 30 per cent growth in revenues, results in a 16 per cent post tax return on equity during 2006/2007.
The company has written a total premium of Rs 601 crore, representing an overall premium growth of 30 per cent with personal insurance contributing Rs 391 crore (40 per cent growth), while commercial insurance contributed Rs 210 crore. Motor insurance was the largest portfolio contributing 51 per cent of the total premium (50 per cent in 2005-2006). Fire and Engineering contributed 22 per cent (25 per cent in 2005-2006) and accident and health contributed 21 per cent (16 per cent in 2005-2006). Rural business continues to exceed the minimum requirements (5 per cent) and contributed 8 per cent of the total premium.
Speaking on the company’s performance, Antony Jacob, managing director, Royal Sundaram said, ‘Our performance this year reflects the benefits from the strategic initiatives which we have implemented in the past and is a reflection of our commitment to deliver sustained profitable growth to our shareholders. Our strategy of focussing on profitable segments and delivering customer delight, supported by technical leadership, is beginning to deliver results. This performance provides us with an excellent platform as we enter the challenging phase of a tariff-free market.’
On the recent changes in the industry, G K Raman, chairman, Royal Sundaram said, ‘We expect tariff abolition to act as a catalyst to drive increased penetration in the insurance industry over the next few years. While the newly established Third Party Motor pool will reduce the overall losses of the industry, more needs to be done on an urgent basis to make this business profitable. These recent changes have re-defined the fundamental value drivers of this industry. The management has formulated a strategy that will optimally leverage available opportunities to deliver sustained and profitable growth.’
During 2006-07, the company has undertaken several strategic initiatives in preparation for the impending changes. These initiatives have provided us valuable inputs to drive our business forward in the future. Royal Sundaram focussed on enhanced customer experience through better use of technology with initiatives such as refreshed website, use of SMS technology and imaging solutions. It has now over 17 lakh customers. For the third consecutive year, the company scored a creditable 82 per cent in the AC Nielsen Customer Satisfaction Survey.
The company distributes its products through multiple channels using individual agents, corporate distribution partners, brokers and direct-to-customer models. Royal Sundaram’s insurance products are now sold in over 150 cities across India, leveraging our own branch network and those of our distributors. The monsoon floods in 2006 and the resultant CAT losses was an unfortunate event for which we were well prepared, be it in fulfilling our promise or in managing the impact of the same on our performance. Source: NewsToday
