Babubhai Kasturchand Shah resigned from New India on December 29, 1972, a company he had nurtured, led and inspired through decades and for the better part of his life.

He had joined New India as a young Actuary in 1936 in his early twenties, and headed it from 1946 for over 26 years. First as General Manager until 1954, then as Managing Director until May 1971 and finally, as Custodian on behalf of the Government until the end of 1972.

Nationalisation had come as a personal, emotional shock to him, people close to him say, and he did not wish to continue. Not surprising, since he had transformed the company not once, but twice in his years at the helm, infusing it with his dynamism and business savvy.

First, when he became General Manager in 1946 he took it to the top position among insurance companies and again, after Life insurance was nationalised, he revived it from the loss and made it the leader of the General insurance industry.

Once the process of nationalisation started, Shah was appointed Custodian of New India in May 1971. This was a departure from normal practice and an acknowledgement of not only the size of New India but the credibility and professional credentials of the top management. He took the company through the process of being handed over to the Board constituted by its new owner, General Insurance Corporation of India (GIC) and laid down office on the last working day before New India was nationalised namely, January 1, 1973.

For a couple of generations of New Indians, he was the inspiration, the taskmaster, the brilliant tactician and the passionate leader of New India. Many held that he was the reason New India succeeded and thrived through decades and, for that he commanded the unswerving respect of his colleagues and inspired awe and envy among business rivals.

The merger scheme of New India came into effect on January 1, 1974 and dealt with the transfer of assets and liabilities of the merged companies into New India, the transferee company.

The following were the merged companies: Anand Insurance Company, Bhabha Marine Insurance Company, Commonwealth Assurance Company, Howrah Insurance Company, Indian Merchants Marine Insurance Company, Indian Ocean Insurance Company, Jalanath Insurance Company, Kalyan Marine Insurance Company, Liberty Insurance Company, Mother India Fire and General Insurance Company, Motor Owner's Insurance Company, Narahari Marine Insurance Company, Naranji Bhanabhai and Company, New Merchant's Insurance Company, New Premier Insurance Company, Northern India General Insurance Company,Porbandar Insurance Company, Shree Mahasagar Vima Company, South India Insurance Company and Vanguard Insurance Company. Also merged were Reinsurance Association of India (International) and Indian Insurance Companies Association.

The services of the employees of these entities, along with their Provident Fund and Superannuation Fund balances, were to be transferred to New India. It was another matter that there were no personnel records in many companies. Stories abound also of overnight promotions and pay rises, and even recruitments into middle and senior management, in the face of the impending nationalisation and merger!

The merged companies were dissolved on the effective date of the merger and their existing shares cancelled.

The capital structure of the new New India was determined as three crore equity shares of R5 each and five lakh preference shares of R100 each.

The smallest General insurance companies were picked to merge with New India due to its size.

The merged companies did not add weight to New India but their staff did, recalls A C Mukherji, retired Chairman cum Managing Director, New India. The mergers added four per cent to the business of New India, but the staff strength it added was one-third.

The staff of the merged companies lacked the training and expertise of the New India employees and New India took it upon itself to train them and develop their skills, giving them opportunities and responsibilities. The merger brought in a lot of good people to New India too which it turned to its benefit, using the skills of its new people to reinvent itself. The merged companie's history has been all but forgotten, but here is some information about some of them.

ANAND INSURANCE COMPANY: A Mumbai-based company promoted by Shantilal K Shah who was Chairman and Managing Director. It had fairly good business by the standards of the era with premium income of R10 lakh from Southern India.

It wrote a range of insurances including Bank Guarantees for buying machinery and repayment of bank loans, Fire, Motor, Cash in Transit, Cash in Safe and Fidelity Guarantee. It had branches in Thoothukudi (then called Tuticorin), Chennai, Vijayawada and Bengaluru.

BHABHA MARINE INSURANCE COMPANY: Promoted by Govardhandas Bhabha of Porbandar, whose family bought and sold country craft as commission agents, this Karachi-headquartered Hull and Cargo insurance company shifted to Porbandar after the Partition. It was small but reputed, and had branches in a few places including Bhavnagar, Veraval and Mumbai. Bhabha died in 1961 in his early sixties and many of his employees who were members of his family joined New India in various locations on nationalisation.

COMMONWEALTH ASSURANCE COMPANY: A small but respected company, its promoters, the Dongre family, also had a medicine farm, the famous children’s medicine called Balamrut and a thriving brewery business.

HOWRAH INSURANCE COMPANY: Promoted in 1940 by the Kolkata-based Alamohan Das, an entrepreneur who grew from near penury to establish a business empire. The group included Das Bank which had over a dozen branches and merged with United Bank of India on nationalisation. Other ventures of his were Bharat Jute Mill, The India Machinery Company, Asia Drug Company, Das Sugar Company, India Steam Navigation Company and Arati Cotton Mills. Alamohan Das also established the industrial township of Dasnagar in Howrah District.

Howrah Insurance Company was a small but competitive company with branches in several places in India including Delhi, Chennai, Amritsar and of course in Kolkata.

The company had a Life insurance department also which was taken over by Life Insurance Corporation of India (LIC) in 1956 along with Howrah Insurance Building in Netaji Subhas Chandra Bose Road in Kolkata. When General insurance was nationalised, Howrah had premium of less than R1 crore.

JALANATH INSURANCE: This Mumbai-based Hull insurer, promoted by the Scindia Group was a subsidiary of Scindia Steam Navigation Company. Its shares were acquired by New India in 1970.

LIBERTY INSURANCE COMPANY: A small Mumbai-based company. One of its minority shareholders was D N Desai whose services were transferred to New India on merger. He was the author of many of New India's Rural insurance policies like Hut insurance, Cattle insurance and Livestock insurance. He retired as General Manager of New India.

NEW PREMIER INSURANCE COMPANY: A company based in Mysuru (earlier called Mysore) promoted by M N Basavarajaiah. He had a reinsurance company called Premier Insurance Company which was closed down. Basavarajaiah was the owner of Premier Studios in Mysuru and is credited with bringing the Kannada film industry to shoot there in the 1970s, spurning Chennai that was hitherto the headquarters of the southern film industry. New Premier was a tariff company doing mainly Fire and Motor insurance. It had more than R45 lakh Motor premium and it is said it would always insure the car of the President of India.

SOUTH INDIA INSURANCE COMPANY: Promoted by the Coimbatore-based, mill owning Naidus, a majority shareholding in it was acquired by New India in the 1940s. Many prominent South Indian industrial houses were its clients, notably the South India Group of M A Chidambaram Chettiar, who was also on its Board.

It became a wholly owned subsidiary of New India in the 1950s and operated from its Head Office in Moti Mahal building in Fort, Mumbai, very close to the New India Head Office. Other insurance holdings of New India like Bombay Fire and General Insurance Company, The Sentinel Insurance Company and Jayabharat Insurance Company were merged into South India at various points of time.

South India mirrored the policies and systems of New India and had its own stream of Apprentice Officers from 1965 onwards, trained and deployed much like the New India Apprentice Officers.

South India's business was also as wide-ranging and sophisticated as that of New India since the latter would guarantee its policies where necessary as per bank requirements.

VANGUARD INSURANCE COMPANY: A highly regarded Chennai-based company promoted in 1937 by H D Rajah, freedom fighter and successful businessman, it had its own building called Vanguard House in Second Line Beach, Chennai.

It was a very small but principled company, says C Chandrasekhar, who joined the company in 1968. "The company used to give employees cover notes and send them to far-off places like Jamshedpur, Delhi and Mumbai where they would settle down and write business".

INDIAN INSURANCE COMPANIES ASSOCIATION: An industry association, it ran the first pool in India, a successful Fire pool. It used to function as the tariff setting body and was headed by a retired officer of the Indian Civil Services. Tariffs were made compulsory later during the Social Control era and a statutory body, the Tariff Advisory Committee, was set up in 1968.

In the mid-1970s, Rural insurance became a focus for New India and the entire General insurance industry.

The need was growing for Livestock insurance and property covers like Pump Set insurance or Hut insurance for small farmers. This drive also achieved the objective of reaching the message of General insurance to remote parts of the country.

Having launched Cattle insurance in the early 1950s, New India started a Rural Non-Traditional Business (RNTB) Department in 1978 and recruited a batch of qualified veterinarians with field experience to manage the business at select offices.

They looked after Cattle, Sheep and Poultry insurance and Agricultural Pump Set insurance. Very popular new covers were Janata and Gramin Personal Accident policies, variations of the standard Personal Accident Policy. This Department was later renamed Rural Insurance Department.

Rural business was highly incentivised and the marketing force responded admirably. Aligned with the priority sector credit initiatives in the banking sector and Government programmes like the District Rural Development Agency’s (DRDA) Integrated Rural Development Project (IRDP) and the Integrated Tribal Development Project (ITDP), Rural insurance awareness and coverage increased rapidly.

In association with nationalised banks, New India supported initiatives like Operation Flood with the all-important insurance cover. National Dairy Development Board (NDDB), based at Anand, Gujarat, spearheaded this highly successful co-operative dairy movement in India. Cattle insurance played a significant role in assured bank financing to support the movement.

Elsewhere, Agricultural Pump Set insurance assisted farmers to ensure uninterrupted irrigation for their lands while Janata and Gramin Personal Accident policies for premiums as low as R12 per year for a sum insured of R15,000 and R5 per year for a R5,000 cover were attractive and protected a sizeable population.

MIRRORING INDIA

The logo of New India reflected the map of India from its initial days. The first logo of the company, seen below, depicted the entire Indian subcontinent as the country was in 1919.