New Delhi, July 5: Iffco-Tokio General Insurance Company (ITGI) plans to float a new 100 per cent subsidiary next month which will act as its corporate retailing agency.
“The new company will do the retail marketing for ITGI by the virtue of being its corporate agent,” said A. V. Singh, chief executive officer of the new company.
ITGI had applied to the Insurance Regulatory Development Authority (IRDA) almost two months back in order to get a corporate agency licence and got an approval within a fortnight. Initially to be called Iffco-Tokio Financial Services Company, the new company has been asked to change its name by the Registrar of Companies (RoC) with insertion of the word ‘insurance’ or ‘agency’ according to the rules.
However, the matter is being resolved and the company is now expected to be finally called Iffco-Tokio Services, said Singh. “This is just a minor formality. IRDA has verbally communicated to us that it agrees to the name change.”
The authorised capital of this company will be Rs 2 crore which will be infused by ITGI out of its own resources as the new company will be its 100 per cent subsidiary.
“Under the IRDA norms, an insurance company has to keep a balance amount in order to keep its solvency margin intact. In addition to the balance, ITGI has earned some profits, which will be utilised in setting up this new company,” said Singh.
Singh said the new company has chalked out a three-year business plan under which they will employ 30 marketing associates (agents) in the first year, expected to grow to 100 in the second year and almost 400 by the end of third year of its operations.
As per the conceptual note given to IRDA, ITGI has said, “In order to develop and provide insurance coverage to vastly uncovered rural population and to educate them about the benefits of insurance, it is deemed appropriate to establish a separate company to act as a corporate agent.”
The new company will initially concentrate on selling personal lines products both in urban and rural areas.