Health will be the fastest growing insurance business: Tapan Singhel

When Tapan Singhel first interviewed for a job with Bajaj Allianz General Insurance Co (BAGIC) back in 2001, it didn't go too well. He was tentative about giving up his government job at New India Assurance and was roundly ticked off by his potential boss for his diffidence.

Interviewer Kamesh Goyal, then COO of the private insurance company and who went on to become the CEO later, however, found Singhel impressive on other counts, especially his domain knowledge and ultimately offered him a job. When he continued to be non-committal, Goyal reportedly told him, "I think you have chickened out." That was enough to provoke Singhel into joining.

Singhel today is one of the few CEOs of non-life companies who is still smiling. Rocked by multi-billion-rupee provisions for motor third party liability claims, many companies have lost heavily. The return on equity earned by most companies is nowhere near the crores pumped in by the promoters. Despite this environment, Bajaj Allianz has managed to consistently report profits for the past 10 years, right from its first full year of operation. The consistent profits have resulted in Bajaj Allianz General Insurance achieving a net worth of Rs 1,193 crore as on December 12 on a Rs 110-crore investment by the promoters at inception.

"Today, BAGIC generates premium that is almost half of Allianz's total business in the Asia-Pacific," says Singhel.

Part of the reason for BAGIC's success is its prudent underwriting policies and its stringent eye on costs, which again is part of the Pune-based company's culture. While Singhel has contributed to the company's success in no mean measure, a large part of the credit also goes to the DNA of the company that has fostered a culture of conservative spending and prudent underwriting. "There is no big secret in making profits. All you need to do is to keep your head cool at all times and watch out for the sweet spot in the market," says Singhel. Coming from New India Insurance, Singhel had sound technical grounding and knew which businesses constituted a 'good risk'. At the same time, he was fully aware of the inefficiencies in the public sector — the delays in policy issuance and in process of making payments.