Hundred years ago, the Tata Group under Sir Dorabji Tata set up a multinational insurance company in the business district of Fort in Mumbai. Set up with an authorised capital of Rs 20 crore, the idea was to have an insurance company that carries out all kinds of insurance activities. While the control of the company, New India Assurance, finally slipped away from the Tata Group to the government, it remains the country's largest non-life insurer.
While it officially received the certificate to commence business in October 1919, it had already earmarked the products segments that the company would operate in. This include motor insurance, property insurance, aviation insurance, marine insurance and life insurance among others.
Now purely a general insurance company, New India issued around 30 million policies in FY19 across all product segments.
Early days
In the initial days, New India shifted in and out of offices. From Hornby Road in Fort, it was shifted to Wallace Street in Fort. In 1923, it shifted to the Central bank building in the same neighbourhood. It was only in 1946 that the company shifted into its present corporate office at MG Road in Fort.
However, since the beginning the insurer was ambitious in terms of its international presence. In 1920, New India commenced operations in London. Today, it operates in 28 countries.
Over the next 25 years, New India had started extensive business on the corporate front. For instance, it was the first company to set up an aviation insurance department in 1946.
During the first few years, the company dabbled with all kinds of businesses in life and general insurance. However, its life insurance ambitions were short-lived because it was required to transfer this business to Life Insurance Corporation of India (LIC) in 1956. This was when the life insurance industry in India was nationalised.
Nationalisation and owner changes
The General Insurance Corporation of India (GIC) was formed under the General Insurance Business (Nationalisation) Act, 1972. This provided for nationalisation of general insurance business in India.
It was then that New India became a subsidiary of GIC. It became a public sector general insurance entity.
Another owner change happened in 2003. After the General Insurance Business (Nationalisation) Amendment Act, 2002, GIC Re transferred its entire shareholding in new India Assurance to the government of India.
This was around the same time that privatisation of the insurance industry was facilitated. Though the fear was that private sector players would eat into the market share of PSU insurers, New India is still the country's largest general insurer with 14.07 percent market share in FY19.
Expansion into GIFT City
In FY12, the insurer touched the milestone of Rs 10,000 crore annual premium. Just five years later, this figure jumped to Rs 20,000 crore.
New India Assurance was also interested in pursuing reinsurance operations through a special unit. In October 2016, New India was the first insurance company to open a unit at International Financial Services Centre (IFSC) in Gujarat International Finance Tec-City (GIFT).
Through this, the company was able to provide global insurance services and facilities to Indian and international customers. Further, it was also able to offer re-insurance business to Indian companies operating in off-shore locations.
IPO
As part of the government's disinvestment drive, New India was listed on the stock exchanges in November 2017. The new entrant's initial public offering (IPO), which sought to raise Rs 9,600 crore, was oversubscribed around 1.19 times. The price band was Rs 770-800 per share.
Super insurer?
A government report is looking to initiate a mega merger of all state-owned general insurers with the aim to create one large public sector general insurance company that will be comparable to Life Insurance Corporation of India (LIC).
If the new proposal is considered, they will be merged with New India Assurance, post-merger of these three insurers, creating an insurance behemoth on the lines of LIC in the general insurance space.
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