MUMBAI: Chicago-based Aon Corporation, the second largest
insurance broking firm, has set up an Indian joint venture with Global Insurance Services
— a company which has been in reinsurance for over 30 years.
Global Insurance has transferred all its people and business to a new joint venture firm
Aon Global Insurance Brokers with the shareholding split 74:26 between Global and Aon.
Global was set up by Prabhod Thakker and focused largely on placing speciality risks such
as aviation insurance, underwritten by local insurers, with global reinsurers through
international brokers such as Aon. The joint venture will be headed by Neil Mathews, chief
executive officer while Mr Thakker has been appointed chairman. Last year, the Insurance Regulatory and Development Authority (IRDA)
for the first time started accepting applications for licence from intermediaries who
wished to do business as insurance brokers. Unlike agents in India, who are tied to one
company, brokers are allowed to sell policies of any insurance companies
Clive Bate, director, executive board Aon Holdings and also
director on Aon Global said that the Asia-Pacific region was small in terms of revenue,
but extremely important in terms of future potential. He said besides corporates Aon would
look at developmental activities such as providing its broking and advisory services in
farm and crop covers. It would also help communities protect themselves against
earthquakes in sensitive areas by providing its geological expertise in measuring
earthquake risks.
Mr Mathews said that the company would begin with offices
in two cities and would expand to 8-9 cities across the country. Commenting on the
potential in the Indian market he said that currently only Rs 530 crore of insurance
premium is routed through brokers. The untapped potential includes Rs 14,844 crore of
direct insurance premium where brokers were not allowed until a few months ago. In
addition to this, there was around Rs 31,200 crore of corporate assets that were
uninsured, he said. He said that the company would grow its business by growing the
market, increasing market share and expanding presence in retail and direct broking.
According to Mr Mathews the main drivers for growth in
Indian insurance will be increased competition, phased detariffing, increased client
awareness for risk management and the introduction of brokers.
"Aon Global is the first and only joint venture with
both partners having strong backgrounds in the insurance broking sector." said Mr
Thakker. He said the joint venture will have access to Aon's global customers including
Mercedes Benz, Nike and Motorola.
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