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PIONEER: ENGINEERING INSURANCE

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The 1950s defined New India's maturity phase in technical expertise. The company pioneered sophisticated forms of insurance, spotting Indian market needs and sparing no effort or expense to create in-house expertise.

It hired experts to set up specialised departments, define standards, create processes and systems, prepare manuals and, of course, train New Indians to become the best in that domain.

In the early 1950s, large projects like dams, thermal power plants and heavy industry for mining and making steel were commissioned.

Closely following market needs was New India. Being familiar with the concept of risk protection through Project insurance, it foresaw financing agencies in India and abroad mandating cover for such projects. So, New India got into a technical collaboration with Munich Re and British Engine, Boiler and Electrical Insurance Company Limited – a specialised Engineering insurance company in England.

Munich Re’s Chief Engineer, Koerner, came to India to set up the Department. Two more German engineers were posted to New India at Mumbai for the first few years to build the Department. They recruited and trained Indian engineers, who in turn made the highly technical Department well-respected for its knowledge, client friendliness and correctness of professional judgement and decision, both in terms of engineering and insurance!

Sophisticated projects were being implemented by teams of engineers at the clients’ companies. The thinking was, says A C Mukherji, if New India’s engineers, trained in insurance and marketing, talked to the clients’ engineers it would make for good understanding and better business.

CORPORATE TRAINING COLLEGE

By 1960, a property in Juhu Lane, Andheri West was being acquired by New India. Sir H P Mody (former Director of New India and later Governor of United Provinces) and his brother Dr K P Mody sold to New India their 38,000 square yard (3,42,000 square foot) property in Juhu Lane (C D Barfiwala Marg today) at Andheri West for R3.5 lakh.

New India's quarters for officers and staff are there and so is the New India Corporate Training College where batches of Direct Recruit Officers stayed and underwent the Foundation Training Programme that ranged from a few weeks to six to eight months.

The latter is currently being redeveloped into a multi-storey facility to house the company's training infrastructure.

TAKING AWAY NEW INDIA LIFE

In the early 1950s, New India had hit its stride and business growth was at its peak. By 1955 it had General insurance premium of R5 crore. In 1954 its Life premium was R5.6 crore.

If that points to quantity, New India was diligent in ensuring the quality of its business as well. Persistency of Life insurance policies, that is, unbroken renewal without lapsation, is much talked of today. Way back in 1952, New India was already monitoring this. Lapsation norms were laid down and a veritable network of bank tie-ups was created across the country to make premium payment easy for the customer.

As on March 31, 1954, the Life Department’s valuation surplus was R1.57 crore. It had declared policy bonuses ranging from R14 to 16 per annum to its policyholders. It was at this highpoint that, on January 19, 1956, the Government passed the Life Insurance (Emergency Provisions) Ordinance, 1956 enabling it to take over all Life insurance business in India.

New India had built up its Life insurance business to become the second largest Life insurer in India only to lose it all to nationalisation. Its revenue came down by more than half. Of its total funds of R30 crore, only R7.5 crore was to be retained, the rest being the Life Fund.

The properties and people related to the Life insurance business also went to Life Insurance Corporation of India (LIC), formed by an Act of Parliament to be the sole Life insurance company in the country, a status it would retain for four-and-a-half decades until the private sector was allowed into the industry in the year 2000.