ECGC takes on competitors on their own turf

Venkatachari Jagannath
10 April 2007

With the opening up of the insurance sector, ECGC''s credit insurance monopoly has gone. Other insurers like New India Assurance Company Limited, Tata AIG General Insurance Company Limited, ICICI Lombard General Insurance Company Limited and Bajaj Allianz General Insurance Company Limited have entered this arena. For them credit insurance is an ideal ''combo'' product for their corporate clients.

Still commanding a 90-per cent of the credit insurance market share Muralidharan and his team are not complacent. The 56-year old Muralidharan, the first insurance professional to head ECGC, has decided to make inroads in the competition''s turf by offering marine and transit insurance policies.

This is largely facilitated by the Insurance Regulatory and Development Authority''s (IRDA) classification of ECGC as a non-life insurer. According to Muralidharan, the company will expand its sphere of activity leveraging its client relationships.

Not only that, he plans to sew up a cooperative co-insurance arrangement with a major non-life insurer so that ECGC can offer a suite of general insurance products. Similarly the ECGC''s partner would be at liberty to offer credit insurance products to its clients.

The two insurers would share the premium income in a predetermined ratio as co-insurers of the risk. Though ECGC has National Insurance Company Limited as its corporate agent, at the latter''s branch level the awareness about credit insurance is very negligible.

Co-insurance arrangement apart, ECGC would start offering domestic credit insurance in a big way. "This is a low risk business. With prudent underwriting and with proper credit limits for the business the risks could be largely minimised. Further small and medium enterprises these days go for credit rating and banks are careful while lending," Muralidharan explains.