D.Murali and S.P. Srinivasarangan

Chennai: While the growth of the insurance broking industry has been satisfactory, a shake out is likely, cautions Mr C. Radhakrishna, co-promoter, India Insure.

With pricing de-regulation and free wording round the corner, and with clients having benefited from the services of large, professionally managed broking firms, he says the broking business is finally coming into its own. “Clients have moved from ‘tolerance’ to ‘believing’ and we are seeing the insurers beginning to collaborate more often than confront.”

An early entrant into the insurance broking industry, the Secunderabad-based India Insure (www.indiainsure.com) offers ‘total insurance solutions’ for corporates, has 9 offices across the country, serving about 300 customers and managing a premium portfolio of Rs 270 crore (2007-08).

In a recent interaction with Business Line, Mr Radhakrishna observed that given the regulated and restricted market that it has been so far, growth from nil to around 15 per cent of the market (Rs 4,000 crore of brokered premium) is to be viewed as a positive sign.

He is quite bullish on the potential of the market. In developed markets, over 90 to 95 per cent of the insurance business is brokered. Mr Radhakrishna is confident that things will turnaround for the better in India. “We envisage that in 3 to 5 years, about 65 to 70 per cent of the insurance business in India will be brokered. Total dismantling of the tariffs will facilitate the faster growth of insurance brokers in India.”

India Insure, which has stayed away from the retail space, is now planning to enter this segment, with the aim of becoming ‘the single largest distributor of insurance products in India over the next 5 years.’

The company is looking to launch a pilot project in one or two cities, marketing retail insurance products – both life and non life – to employees of its corporate clients using the clients’ work site, with a plan to expand to all the branches in 12-18 months.

Mr Radhakrishna turns cautious when asked about the outlook for the industry, and expects a consolidation in the market place. “Insurance broking is in for a rough but interesting ride. Premium drops for insurers meant steep revenue cuts for brokers too. Finally, the men will be separated from the boys and only those brokers who have long term ambitions and deep pockets will flourish.”