Kolkata-based Magma HDI General Insurance Company Ltd is betting big on smaller towns and cities. The company, which recently started insurance business with its first motor insurance product, said it has a pipeline of about 25 products to unveil once it gets necessary approvals from the insurance regulator IRDA.
Magma HDI is a JV between NBFC firm Magma Fincorp (74 per cent stake) and Germany’s third largest insurance provider HDI General (26 per cent stake).
“Currently, urban locations are populated with existing insurance players. We are the 26th general insurance company in the country and several products are already in the market. But penetration of these products in tier II and III cities is low and we intend to cash in on this market opportunity,” Swaraj Krishnan, CEO, Magma HDI told Express.
He added that while the four public sector insurance companies including LIC and United Insurance have presence in smaller towns, private sector players do not have a significant footprint. “We will piggy-back on Magma Fincorp’s existing network to start insurance business. That way we can keep our capex low and invest in quality manpower,” he said.
Magma HDI received nod to set up offices in 39 locations to begin with. So by the end of March, 2013, the company is targeting to commence operations in 54 offices and about 100 by June, 2013. Within AP, Magma Fincorp operates out of 23 branches and by June, 2012 about 15 locations would be dealing with insurance products.
Meanwhile, in a bid to offer a unique set of insurance products, Magma initiated an internal research to try and identify the market requirement in small towns. Based on the feedback, it will design products, possibly region-specific insurance policies. The study is expected to completed by the end of November.