Cholamandalam MS General Insurance Company Ltd (Chola MS), the joint venture between Murugappa Group and Japan’s Mitsui Sumitomo insurance group, plans to re-enter the Rs 25 billion crop insurance business after a gap of three years .
“Almost three years ago, we took a break from the crop insurance business. This year, we are looking to re-enter the crop insurance space. We have even secured reinsurance arrangements for that,” said V Suryanarayanan, MD, Chola MS.
He was on his way to a news conference here on Thursday to highlight the company’s financial and operating performance in fiscal 23.
crop insurance business
Suryanarayanan said that the crop insurance business is estimated at around Rs 25,000 crore, of which around Rs 12,000 crore is handled by public sector insurers, while the remaining business of Rs 13,000 crore is divided among the players. of private insurance. He added that the company exited the crop insurance business due to issues such as failure to receive premiums from some state governments.
However, he added that some of the operating arrangements of the crop insurance business have changed over the last three years, causing the company to reconsider its entry into the space.
In the general insurance industry, almost 80 percent of the business comes from auto and health insurance, followed by property insurance (12 percent) and the rest from crop insurance.
Suryanarayanan highlighted that crop insurance is a bid-based business and insurance companies have to compete through a bidding process to enter a particular state. He said the company is looking to operate in states like Madhya Pradesh, West Bengal, Uttar Pradesh and parts of Rajasthan and Maharashtra.
Meanwhile, Chola MS ended FY23 with a Gross Premium Written (GWP) of Rs 6.2 billion, up 27.6% from FY22. The company’s pre-tax profit for FY23 was of 264 crores (106 crores). As of March 2023, Chola MS had a net worth of Rs 2.16 billion and a solvency ratio of 2.01 times against the minimum regulatory requirement of 1.5 times. The company’s investment corpus at the end of FY23 stood at ₹14,715 crore.
Suryanarayanan said that Chola MS has a 5.3 percent market share in the auto business line and 4.9 percent in the personal accident business line.