Chennai: His job is to sell fire insurance policies to southern corporates. And he has excelled in it. He is K Bharathan, regional head (south), ICICI Lombard General Insurance.
Fire insurance is the most profitable and bulk-premium income business for a general insurer. Not just that. Once you strike the fire insurance premium (burglary insurance is included in that package deal), it's just a matter of time for a corporate to place its other insurance business like transit, group mediclaim and group personal with that insurer.
After driving on the wrong lane by indulging in motor insurance, ICICI Lombard, a 74:26 joint venture between ICICI Bank and Lombard General Insurance, Canada, has been steered to the profitability path with a clear focus on corporate fire insurance business.
As a matter of fact, it was the company's southern region that test-fired this concept after studying its manpower and other issues that would crop up if the company goes for multiple business lines. The success of this approach has made ICICI Lombard replicate this strategy nationwide, leaving the competition scaled.
''That doesn't mean we shun motor insurance business. We insure vehicles owned by our clients,'' Bharathan, 52, says. According to him 85 per cent of the company's premium in the south will come from fire insurance and the balance from transit, group mediclaim, personal accident, overseas travellers insurance among others.
At his age, when others would think twice before switching jobs, Bharathan, a chartered accountant by qualification, didn't think too much when he came on deputation to the insurance company in June 2002 from ICICI Bank.
Beginning his career as a credit manager at Lakshmi Vilas Bank, Bharathan later moved to ICICI, then a financial institution. Spending some years in Mumbai, appraising project reports of large corporates, he settled down in Chennai in 1987. He soon started climbing the corporate ladder to head the southern region while building a reputation as a no-nonsense executive.
Ask him how it feels to sell insurance policies after spending 21 years in project-lending activities, and he would say: ''Both deal with customer relationship and risk assessment. I find this interesting and quite challenging.''
He dismisses the industry flak that ICICI Lombard bags business thanks to its Indian parent's relationship with its corporate borrowers and by violating the tariff as canards. ''I earn my business and this is not due to the influence exerted by ICICI Bank on its borrowers to buy insurance covers from us. And 65 per cent of the general insurance business falls under the tariff structure (premium fixed by the Tariff Advisory Committee) with no leeway for the players. We will never go against the tariff.''
Even a high official at the Insurance Regulatory and Development Authority (IRDA) wonders whether ICICI Lombard would risk damaging its parent's name in the market by doing that.
According to Bharathan, the fire insurance tariff is aggressively interpreted to favour clients. ''Earlier nobody attempted that. And now we are doing just that.'' Unlike in other companies where underwriting is some sort of a back-office job, at ICICI Lombard the underwriters actively consult the marketing team and the client while devising the cover and quoting the premium.
Thanks to its parent's clout, ICICI Lombard enjoys the advantage of knowing in advance about new projects, and then pitches for business. This is a normal business practice, and competitors should not have any complaints except chewing their nails. The data helps the insurer's marketing executives to study in detail about a prospect, the industry in which it operates and also the production process.
Giving the field force a good grounding in insurance subject is ICICI Lombard vice-president P Balasubramaniam, a former United India Insurance Company hand. ''My boys do their research before meeting a prospect so that the discussions are truly professional and they don't end up asking silly questions,'' boasts Bharathan.
Detailing how the corporate focus got initiated, Bharathan says his team first analysed the industrial scene. It found that the power sector pays the largest premium and decided to tap that sector first. Today he proudly claims that the company is covering almost all the power projects in the south.
''That doesn't mean our focus is only on the power sector. I am an insurer and not a lender who can avoid lending to certain sectors,'' says Bharathan. The focused approach resulted in the southern region bagging big tickets in most sectors and in the process exceeding its annual targets.
Last fiscal as against an annual premium target of Rs 20 crore income the region achieved a premium income of around Rs 42 crore. ''Next year we will double our premium,'' he is confident.
Bharathan says there are two ways of doing insurance business - accept all the business that comes in the way or be selective so that the bottomline is not soaked in red. Being selective about his clients, he swiftly settles claims if any. ''The total claims outgo of the southern region is around Rs 2.30 crore resulting in a handsome underwriting profit of around Rs 40 crore.''
When queried about the retail focus, he says: ''For the first few years we will predominantly target the corporate sector as doing retail on a major scale is not economical today. Even at ICICI Bank, the retail thrust was made after tying up all loose ends.''
The company, nevertheless, has launched several retail and personal lines of business and gathers a good feedback for the same. Signs of a big retail thrust are evident. ICICI Lombard today has enabled its corporate customers to print out transit insurance overseas travel insurance policy documents on the net.
The tall-and-trim Bharathan attributes his team's success to the company's hiring policy. Apart from hiring experienced hands from government companies, the company has always opted for fresh MBAs who have specialisation in insurance.
But what gives the team the necessary pep is his participatory management style. Says Naresh Ramaswamy, senior manager, underwriting: ''Most of the decisions he make are taken in a consultative manner. He gives us the necessary freedom and also listens to ideas.''