Private insurance companies are gearing to enter the race for the Air-India account once it is up for bidding. Last year A-I paid a premium of $14 million to the New India Assurance-led consortium. The account will expire on June 30.
"This year the premium will go up substantially as the airline will have at least 50 aircraft by March 2007. Now, private players are keen on wresting the account from the PSU monopoly," sources said. As the competition hots up, all interested parties are expected to offer hefty discounts.
Last year, the consortium had offered hefty discount of 28 per cent to bag the account.
When contacted, a senior A-I executive said: "We will shortly invite bids for aviation insurance for this year," he said.
Other than PSU companies, eight private insurance companies are also readying for the race. The private players are ICICI Lombard, Tata AIG, Bajaj Allianz, Iffco-Tokyo, Cholamandalam, Royal Sundaram, Reliance General Insurance and HDFC.
"Some of these players have managed to capture non-aviation insurance contracts, including fire insurance (ICICI Lombard), motor insurance (Cholamandalam) and engine facilities insurance (Reliance General)," the sources said.
Public sector majors and an increased claim settlement ratio will give a tight fight for private players. "All over the world, insurance layout has gone up in the wake of the hurricane fears. Though there was no major tragedies except the Mumbai flood domestically, insurance exposure for companies here are going to be on the higher side," an analyst said.
The strategy of private players would be to bag the account from PSU companies with attractive discount in the premium through negotiations.Do you want to discuss stock tips? Do you know a hot one? Join the Stock Market Investments Discussion Group