Financial Daily from THE HINDU group of publications
Saturday, May 11, 2002
Maruti to insure own vehicles -- Ties up with Bajaj-Allianz, NIC
Mr Jagdish Khattar, Managing Director, Maruti Udyog Ltd, flanked by Mr Sam Ghosh, CEO, Bajaj Allianz General Insurance Co Ltd (left), and Mr Amalendu Ray, General Manager, National Insurance Co Ltd, at the launch of Maruti Insurance in the Capital on Friday.
NEW DELHI, May 10
MARUTI Udyog Ltd on Friday forayed into motor insurance for its vehicles in association with two partners as part of its efforts to diversify revenue streams and attract customers with a broader range of service.
The country's largest car maker will distribute motor insurance policies to its buyers under the `Maruti Insurance' brand, which have been formed in alliance with Bajaj-Allianz General Insurance Co and National Insurance Co Ltd.
Maruti Udyog, a joint venture between the Government and Japan's Suzuki Motor Corp, will act as the corporate agent for these insurance companies insuring Maruti cars under the new scheme. It has set up two insurance distribution subsidiaries as part of the foray Maruti Insurance Distributors Services (MIDS) and Maruti Insurance Brokers Ltd. (MIBL).
While MIDS has partnered with Bajaj-Allianz, MIBL will work with National Insurance. Policies will be sold to customers at all Maruti dealerships under the `Maruti Insurance' brand. The reason for such a venture is to help spare customers problems related to post-accident repairs and recovery of insurance claims at the Maruti dealership itself, which will be extensively supported by the IT network of the car maker.
As per the provisions of the insurance venture, the customers will be provided quick tow-away of the vehicle involved in an accident and the claims settled in a no-cash settlement with the dealer itself.
In a break from the past, the dealer will be permitted to settle insurance claims below Rs 20,000 and a surveyor will be called only if the claim is above that amount, Mr R.S. Kalsi, General Manager (New Business) of Maruti, said at a press conference. Maruti's Managing Director, Mr Jagdish Khattar, said that the foray would provide customers the entire range of services under one roof of the dealer.
The entry of Maruti, in which the Government is set to divest its equity stake shortly, into insurance and its recent foray into used car business, fleet management and car finance are part of the company's diversification plan.
Management consultancy firm AT Kearney had recommended to Maruti, which has put over 3.5 million cars on the road so far, that the company look at non-manufacturing activities as a future source of income to supplement its core business.
The company hopes to earn a fee for selling these policies to new and existing Maruti car buyers. Annually new Maruti car buyers contribute about Rs 300 crore to the kitty of insurance companies.
"Initially, we will be targeting only the new cars. Afterwards, we can look at the existing customers who bought a Maruti car in the last two-three years (which would be about one million in number)," Mr Kalsi said.
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