Mahindra Insurance eyes rural retail business

Ruchika M. Khanna

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Tribune News Service

Chandigarh, August 18

Mahindra Insurance Brokers Limited (MIBL) has become a Rs 520-crore company within 11 years of its inception by providing insurance solutions to the under-penetrated rural market and catering to under-served customers.

Started with an equity capital of Rs 50 lakh in 2004, this Mahindra Finance subsidiary now boasts of serving over five million customers, providing them with both life and non-life insurance products. What makes the company’s success unique is that 80% of its business (Rs 1,003 crore premium generated in 2014-15) comes from servicing rural clients. With an aim to reach among the top 100 global insurance brokers by 2020, the company is looking at its rural retail business and reinsurance business to help achieve its target.

Talking to The Tribune here today, Dr Jaideep Devare, managing director of the company, said the company’s focus will continue to be in rural retail business. “Besides focusing on rural business, we will continue with commercial (insurance products for micro, small and medium enterprises) and reinsurance business. Considering the fact that the insurance penetration in both life and non-life insurance is 3.4% and 0.8%, respectively, and much less at about 1% and 0.3% in the rural areas, we believe there is a huge market for us to grow.

With the government’s efforts now on financial inclusion and insurance covers in the rural India, the rise in awareness among people will help increase this penetration,” he said.

Dr Devare said the company has touched one lakh villages in the country where they are reaching out through 300 branches of Mahindra Finance. “What has helped the company attract the rural masses to the insurance sector has been the innovative products offered by them such as loan suraksha, where in case of death of the loanee, his outstanding loan is waived. In Punjab, we are servicing one lakh customers in 5,000 villages,” he claimed.

He said though as of now they have a physical presence across all geographies in the country, they would soon be a brick and click company by offering online insurance.