Rti Chapter i

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CHAPTER-I

PARTICULARS OF THE ORGANISATION, FUNCTIONS & DUTIES

HISTORY

The Oriental Insurance Company Ltd." earlier known as "The Oriental Fire & GeneralInsurance Co. Ltd" was incorporated at Bombay on 12th September, 1947. TheCompany was a wholly owned subsidiary of The Oriental Government Security LifeAssurance Company limited and was formed to carry out General Insurance business.The Company was promoted by Sir Purushothamdas Thakurdas, Chairman of OrientalGovernment Security Life Assurance Company Ltd., which was transacting lifeinsurance business for nearly 75 years.

The Company's Head Office was located in Bombay. The premium of the Company inthe first year of its operation was only INR 99950 (US $3000). On nationalization of LifeInsurance business in India, in 1956, the company became a subsidiary of Life

Insurance Corporation of India (LIC). Subsequently on nationalization of generalinsurance business in India in the year 1973, the company became one of thesubsidiaries of General Insurance Corporation of India (GIC).

10 Indian and 12 Foreign Insurance companies merged with Oriental Fire & GeneralInsurance Co. Ltd. At the time of Nationalization in 1973, the Company's Gross DirectPremium was Rs. 580 Millions ( US $ 16.57 Millions ).The Company's Registered andHead Office was shifted from Bombay to New Delhi. The name of the Company waschanged in the year 1984 to The Oriental Insurance Company Ltd.

However, after the passage of the Insurance Amendment Bill (2002), OrientalInsurance Company Limited was delinked from GIC and in 2003 the shares of thecompany so far held by GIC have been transferred to Central Government.

LINES OF BUSINESS

The Company underwrites all non-life insurance business in Fire, Marine, Engineering,Health, Motor and other misc classes of business taking care of needs of industrialgiants as well as common man. The Company has more than 100 different products for the cross-section of the economy.

PRESENT SET-UP & STATUS

The company has grown over the years and at present operates from 900+ offices inIndia with nearly 16,000 committed and dedicated employees with internationalpresence in Dubai, Nepal and Kuwait. It has continued to achieve highest growth rateamong the public sector non-life insurance companies for the years 2005-06 and 2006-07. Its gross premium income has reached the level of Rs. 4020 crores (US $ 100 billionapproximately) in the year 2006-07 with operating profit of Rs. 630 crores.

As of March 31, 2007, Oriental’s investment portfolio is of Rs 10,869 crore as against Rs11,262 crore on March 31, 2006. Oriental Insurance issued 99,24,462 policies in 2006-



07 and settled 555,302 claims during the same period. Oriental’s record of settlingcustomer grievances satisfactorily is an impressive 94.46 %. National Consumer Weekwas observed from 24.12.2006 to 30.12.2006. During 2006-07 Oriental Insuranceregistered a growth of 11.39%, the highest among all public sector general insurers, for the second year in succession.

As India’s insurance sector is fast changing, with the IRDA dismantling the tariff regimewith effect from 1st January 2007 for Fire, Engineering & Motor portfolios — allowinginsurers to freely price their products--Oriental Insurance is already prepared with itsnew software system – the Integrated Non- Life Insurance Application Software. Thissoftware will enable all offices to be interconnected through a central data center. Thesoftware is implemented successfully in 262 offices as at 31st March 2007 and theCompany plans to achieve 100 % implementation by the end of financial year 2007-2008. For its Investment Portfolio, Company has procured a SAP based module whichprovides integrated approach to management of investments. We have a Reinsuranceaccounts module based on Unix / Unify platform which has been running successfully for the past 15 years. To arm its officers with the skills critical in a free pricing system,Oriental has imparted rigorous training. To ensure that relationships with its customers

are built and strengthened Oriental has put in place an efficient grievance mechanism atevery level. Expansion of Oriental’s reach has been made possible by using moreplatforms. Towards this end, it has tied up with various scheduled banks like Dena Bank,Oriental Bank of Commerce, Indusind Bank. It is also using the nationwide network of post offices to reach more people.

RESULTS 2006-07

The Company’s Gross Direct Premium Income in India during the year 2006-07(Audited) was Rs.3928.52 crores and the Premium Income outside India was Rs.92.26crores. The Gross Direct Premium in India & abroad showed a growth of 11.39%. TheNet Premium Income (Domestic and Foreign), on the other hand grew by 15.17% from

Rs. 2500.46 crores in 2005-06 to Rs. 2879.74 crores in 2006-07. The company’soperations in Nepal, Dubai and Kuwait yielded a Gross Direct Premium of Rs. 92.26crores during the year 2006-07 as against Rs. 82.66 crores during the previous year.The net premium on foreign operations stood at Rs. 86.77 crores and as against this, theNet Incurred Claims during this year in respect of foreign operations wereRs.36.96 crores at 42.60%. The foreign operations have resulted in an overall surplus of Rs.19.06crores.

After taking into account the income from Interest, Dividend & Rent of Rs. 560.08 croresand Profit on sale of Investments of Rs. 600.01, we have posted a pre-tax profit of Rs.629.64 crores & post-tax profit of Rs. 497.27 crores for the year 2006-07. The Companyhad a documents issuance ratio of more than 98% during the year, having issued 99.24

lacs documents approximately. The claims disposal ratio for non-suit claims settlementratio was 86.82%.

RATINGS

The company’s financial health is evident in the fact that CRISIL has consistently, for many years, given the company a “AAA” rating. ICRA – an Associate of Moody’sInvestor Service – has also rated Oriental as iAAA, indicating the highest claim-payingability. This rating also reflects the company’s strong liquidity position. For two years in



succession, Company has also got financial strength rating of “B++(Good)” andissuer credit rating (ICR) of “bbb+” since 2006 from A.M.Best, UK. The solvencyratio of the company as on March 31, 2007 was a very healthy 2.17 times.

AWARDS

Our Company has been voted “Consumer Superbrand 2006-07” status by theindependent Superbrands Council for the second year in succession. The Company hadbeen awarded the prestigious International Marine Insurance award of Lloyds list2006 for rendering exceptional professional services at a colorful ceremony held inDubai. Our CMD Shri M.Ramadoss was recently adjudged as the Best CAProfessional Manager in Public Sector companies by The Institute of CharteredAccountants of India. The Company made its presence felt in IT world when ShriS.K.Chanana, GM (IT) was awarded CIOL (Extended Manager) award for the year 2007. The Company was ranked 3rd by “Business Today” for its top visibility andimage score in General Insurance category. The Company was also honored by theCentral Excise & Service tax Department as one of the highest tax payers in India.

CORPORATE MISSION

To contribute to the socio economic objectives of the nation by being a vibrant andviable organization catering to the growing insurance needs of the community. Towardsthis end we will strife for management of business operations.

CORPORATE OBJECTIVES

To serve better the insurance needs of the entire community, keepingCUSTOMER as the focus.

To strengthen our tradition of being CUSTOMER-FRIENDLY, in order to providequality service.

To manage Business profitably, manage funds judiciously and deploy investiblefunds for optimum yield.

To optimize the retention of Indian business and conduct reinsurance andinternational operations in the best interest of the country.

To work towards minimization of losses and develop Risk ManagementTechnologies.

To function as a strong and dynamic non-life insurer

NEW CORPORATE VISION

WE ORIENTAL WILL:

• Be a financially strong leader in industry both in market share and profits; brandimage being synonymous with general insurance.

• Be a recognized for best in class customer service with transparent and ethicalpractices.

• Be an innovative company with latest technology enablement and having fullrange of empowered distribution channels.

• Be a public listed company; continuously creating value for its employees andshareholders.



• Be a top employer with highest employee productivity and progressive HRpolicies.

• Be a company with a core value system based on trust, integrity andperformance culture.

•

PARTICULARS OF ORGANISATIONDATE OF INCORPORATION 12TH September 1947MODE OF INCORPORATION Incorporated as a Public Limited company

under the Indian Companies Act, VII of 1913

ADMINISTRATIVE MINISTRY Ministry of FinancePRESENT STATUS A Government company within the

meaning of Sec. 617 of the Companiesact, 1956

SHRE CAPITAL:AUTHORISEDISSUED AND SUBSCRIBED

Rs. 200 CroresRs. 100 Crores

PRESENT SHAREHOLDING President of India (100%)

FUNCTIONS AND DUTIES

The Oriental Insurance Company Limited carries out its functions and duties inaccordance with the objectives defined in its Memorandum & Articles of Association andthe guidelines laid in Insurance act 1938, General Insurance (Nationalization) Act 1972(since amended in 2002) and IRDA Act 1999.

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Rti Chapter i