Tata Locomotive and Engineering Company (later renamed Tata Engineering and Locomotive Company or TELCO, and now called Tata Motors) was formed in 1945 and started manufacturing trucks at Jamshedpur under agreement with Daimler Benz of Germany. Since then it has been a valued Tied client of New India. New India has a Branch inside the company's factory premises in Pimpri, Pune, and a Tied Divisional Office dedicated to its business at Mumbai.

New India sought TELCO's help in a different context. Motor insurance involved a chaotic and difficult-to-manage set of customers, namely the truck owners and transporters. This portfolio is characterised by its high incidence of claims, and hence costs.

New India had to get innovative and methodical to meet this challenge. Instead of relying on dubious repair estimates by garages, B K Shah created expertise within the company to survey Motor insurance claims and manage them.

He recruited automobile engineers to work as Motor Claims Inspectors and TELCO shared its expertise by training them. New Indians learned from the source and from the best experts!

This practice started from 1958 and increased New India’s risk management capabilities, making Motor claims ratios manageable and helping to make the business sustainable.

Health insurance was launched in India in 1985-86 when Prime Minister Rajiv Gandhi made an announcement in Parliament, right? Yes and no.

The hospitalisation policies for individuals Mediclaim was launched in 1985-86, but New India had pioneered Corporate Health insurance way back in 1938. It had half a dozen Health insurance policies by the late 1950s and early 1960s and the employees of many top Indian companies as well as multi-national corporations operating in India, like the oil company Esso (later Hindustan Petroleum), were covered.

As for the rest of the industry, many companies were offering Health insurance. "My impression is that New India was the pioneer," says Piyush I Majmudar, an Actuary who was at the helm of the Health Insurance Department from 1965 for almost a decade.

Majmudar rejoined New India in 1962 from the office of the Controller of Insurance and was in charge of the Foreign Department and some classes of business including Health insurance.

In 1965, Majmudar recalls, the management decided to create a separate Department for Health insurance which wrote only group policies for large and special clients like the Tatas and the Mafatlals where New India had very good overall loss experience.

"We gradually developed it into a big Department and I was in charge till about 1973. The management always emphasised that losses should be minimised with better controls," Majmudar says.

This included scientific rate revisions by actuaries and proper monitoring and management of unprofitable policies to ensure that the business stayed sustainable.

Marine Hull insurance was a significant portfolio for New India and the company developed its expertise in the field systematically.

B K Shah recruited Master Mariners "who knew which was port and which was starboard," to put it in A C Mukherji's words, to manage the business. The company's strategy was that Master Mariners working with New India would be best at talking business with the Master Mariners in shipping companies. It was thus that Captain S M Divekar, a Master Mariner with Ratnakar Shipping, joined New India's Hull Department in October 1964.

Since the 1930s New India had studied the business dynamics of Hull insurance. Being highly specialised and covering large sums insured, Hull insurance was placed only through Brokers in the London market those days. New India approached them for a small share and took home the papers to study.

The company learnt to rate hulls and, by 1964 could quote rates for risks up to £1 million on its own. It upped its game continuously and today, with treaties in place, it does not have to go to reinsurers for rates for coverage up to R200 crore (about £22 million).

SUPPORTING CAPTIVES

As it gained expertise, New India approached Indian ship owners for their Hull business. B K Shah convinced the Scindias to start their own Hull insurance company assuring them of technical support.That is how Jalanath Insurance Company was formed, later acquired by New India in 1970.

It was celebration time for New India in 1969 when the company turned 50. The 1960s was a prosperous time for the company, bouncing back after the loss of its Life business. The regular annual bonus to staff was 25 per cent.

Over and above this was a Special Golden Jubilee Bonus of one month's salary. Shareholders too had good news in the form of a bonus issue approved at the 50th Annual General Meeting.

The company marked the occasion by publishing a Golden Jubilee booklet sketching its history. In the booklet, J D Choksi, the then Chairman of the company, refers to Founder-Chairman Sir Dorab Tata's conception of New India as a public company to serve as a national trust in the true sense of the term and says: "It is a matter of gratification that the Company today occupies a premier position in the field of General insurance in India and also operates actively for direct and reinsurance business on a worldwide basis."

Referring to the many challenges advancements in science and technology, the changing socio-economic order and the recently imposed social control legislation that placed special responsibilities on insurers in India he proclaims: "I have no doubt that the "New India" will do its best to meet all these challenges and continue to remain in the forefront of Indian insurance."

A C Mukherji, then an Assistant Manager, recalled how he and V C Vaidya, then Manager (both of them rose to the post of Chairman cum Managing Director of New India in the 1980s), pored over Board minutes and other documents to cull the early history of the company.

"This gave me a beautiful story," he said. "The story of New India as I have seen and learnt in its various phases was not just history. It is the saga of an institution facing challenges and seizing opportunities."

In December 1969, the Government was planning to nationalise the General insurance business. The All India Congress Committee had passed a resolution to this effect in its session in Mumbai.

The General insurance industry, led by the New India management, made its best lobbying efforts, arguing that this business was highly complicated and its decision-making discretionary, making it unsuitable for nationalisation. It also argued that there was no social security angle warranting protection by nationalisation, as was the case with Life insurance.

Morarji Desai, the then Union Finance Minister, met with industry representatives during a visit to Mumbai and left convinced that the argument of the industry was indeed acceptable and recommended social control rather than outright nationalisation.

Social control, imposed on banks earlier by the Banking Laws (Amendment) Act, 1968, brought in certain measures to align the banking system to the objectives of economic policy.

Similar measures were imposed on insurance companies including prohibition of Principal Agency arrangements and a control on Commissions payable on business procured under tariffed categories of businesses. These were introduced in 1968 and a strong foundation for social control was established.

The respite regarding nationalisation was, however, short-lived. The Government persisted with Socialism as an ideology and went ahead with the proposed nationalisation of General insurance.