New Delhi, June 11: ICICI Lombard General Insurance Company is planning a fresh capital infusion of Rs 110 crore by the end of July.
This is the first capital expansion by the private insurer since it started operations in August 2001.
The capital investment will raise ICICI Lombard’s paid-up capital to Rs 220 crore, making it the largest capitalised private insurer in the country. It will overtake Cholamandalam General Insurance Company which currently is the largest non-life capitalised company with a paid-up capital base of Rs 142 crore.
“The board has just cleared the decision to raise the existing capital. It will happen before the end of next month,” Sandeep Bakhshi, managing director and CEO of ICICI Lombard General Insurance (ILGI), told The Telegraph.
“Unlike other insurers we did not want to make any small investments. We knew when we had to do it and so in the very first time we have decided to double the investment,” he added.
Discussing his plans to turn aggressive in the eastern part of India, Bakhshi said: “We already have five branches in Calcutta, Bhubaneswar, Guwahati, Ranchi and Raipur. We will definitely add another four branches by the end of this financial year.”
He added that over 15 per cent of the entire premium collection by ILGI is contributed from eastern India. The insurer collected a total premium of Rs 215 crore for the year ending March 31, 2003. This was much higher than Rs 27 crore premium collected by ILGI during the eight-month period between August 2001 to March 2002.
Recalling the fact that general insurance industry recorded a total premium collection of Rs 12,311 crore in 2001-02 and Rs 13,934 crore for the year ending March 31, 2003, Bakhshi said, “It is encouraging to see that the sector is growing at the rate of 20 per cent.”
Private insurers have had a hard time developing their business since they were allowed to enter the field in 2000. During the year 2001-02, private insurers contributed only Rs 470 crore to the entire premium collecting, accounting for only 3.8 per cent of the business.