JLT Independent Insurance Brokers, a joint venture between global insurance broking major Jardine Lloyd Thompson (JLT) Group and Sunidhi Group of India, has crossed the Rs 1,000-crore mark in business from its India operations.
Having crossed the milestone in three years of its operations in India, JLT is giving tough competition to players in the Indian insurance broking market.
The race is about to get even tighter, with Sanjay Radhakrishnan, CEO, JLT Independent, telling Moneycontrol that the company is looking for acquisitions. Radhakrishnan sheds more light on the business strategy and growth plans. Edited excerpts:
How has the company performed financially and across business segments?
We crossed Rs 1,000 crore of placements, meaning this was the amount of business we procured from the Indian market. Also, we now have 1,100 clients in India.
We have a balanced portfolio, and have presence in aviation, credit, oil and gas, health, marine, property, construction and treaty reinsurance. Though we have a fairly healthy mix, employee benefits still forms a major chunk of our business.
Are you open to acquisitions?
In 2016, we acquired Vantage Insurance Brokers, which was a specialist broker in employee benefits. Now, we are looking for acquisitions and are open to doing it this year. Ideally, we would look at a company that is present in all specialties that we are in.
There have been rising concerns around the price discipline in the Indian non-life insurance market. What is your view?
Liability insurance as a category is still seeing a drop in pricing especially in over-the-counter products like Directors and Officers Liability as well as Errors and Omissions Policies. Similarly, property insurance prices have dropped which has come in a surprise.
However, group health market prices have gone up. Because health forms a large chunk of the industry, the market seems to be a little more stable than before.
The agricultural insurance space has seen a big jump due to the Fasal Bima Yojana. Do you work with insurers here?
We have an agriculture vertical and do placements of business for this segment as well. Currently, we are doing a lot of analytical work for insurers.
Similarly, we are working with reinsurers and have been using proprietary models to do risk analytics for them.
Have global reinsurers started writing business from their India branches?
Most of the global reinsurers who have opened their India branches were even otherwise already present in this market. What will change is that once they bring in more capital, more capacity will be available here. But currently, they have been on a wait-and-watch mode and have been primarily participating in the treaty reinsurance business.
Would you be open to enter the retail insurance space? Will this mean an increase in the headcount?
JLT doesn’t do retail anywhere else in the world. But in India, we are looking to get into the online space in retail. Since we already have a captive audience of 2 million lives that we insure, we are looking at seeing if we can service them online for their retail needs including motor, health or life insurance.
When it comes to manpower addition, we have close to 2000 people on board. This year, we will be hiring 50 specialists across the business segments.
The market is seeing a major shift of broking business from one company to the other. Is the movement primarily for better pricing?
What is happening is that clients are looking for expertise. The movement is from those insurance brokers who don’t have expertise to those who do.
Earlier, the selection of an insurance broker was only based on pricing. Today, pricing is not a major denominator, but the insurance wordings and specialised coverage are crucial.
In this year, would you expect a large portion of liability business to come from financial institutions considering the recent bank frauds?
In segments like cyber, what we seeing is that lot of financial institutions are looking to increase their limits. In some of the institutions like banks, they are increasing the cyber limits within the overall liability covers. Further, from an average cover of USD 3-5 million taken for frauds earlier, banks are looking at as high as USD 30-50 million of fraud risk coverage.