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Shriram makes foray into general insurance

CHENNAI: Shriram Group of Chennai has announced its foray into the general insurance space by setting up a joint venture company in association with Sanlam Group of South Africa.

Shriram General Insurance Company will have a paid-up capital of Rs. 105 crore. Shriram Financial Services and Holdings Private Ltd., an entity of the Shriram Group, will hold 74 per cent stake in the joint venture.

The balance will be held by the Sanlam Group through its general insurance arm, Santam.

The joint venture will be headquartered in Jaipur and will formally go on stream on July 23.

Shriram Group, it may be recalled, has already a running life insurance joint venture with the Sanlam Group. It had reported a profit after tax of Rs. 9.50 crore in 2006-07 and Rs. 5.58 crore in 2007-08.

The general insurance business of the Shriram Group will commence with the launch of 15 products approved by the Insurance Regulatory and Development Authority (IRDA) of India. The company is hoping to write a premium income of Rs. 200 crore in the first full year of its operations.

Addressing a press conference here on Wednesday, R. Thyagarajan, Chairman of the Shriram Group, said the joint venture agreement had provided for Sanlam to increase its stake to 49 per cent should the Government allow it as a matter of policy.

The Chairman said the new entrants into the general insurance business had focussed only on getting a share of the existing premium income.

“No attempt has been made to garner premium by creating new markets for general insurance business,” he pointed out.

In this context, Mr. Thyagarajan said the Shriram general insurance joint venture would focus on brokers. “We will work with them. We will support them,” he said.

He said the joint venture would get into areas such as consequential insurance, dishonesty insurance, theft and personal accident insurances.

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