IOC awards mega cover to New India again, miffs rivals
Indian Oil Corp's decision to award its mega insurance policy for a ₹4.52-lakh crore cover to New India Assurance Co for the ninth consecutive year has caused a stir among rival general insurers, prompting one of them to write to the petroleum ministry to seek a fresh tendering award, people ET spoke with, and emails accessed by this newspaper showed.
New India has been backed by US reinsurer Chubb in this mega insurance deal for the country's biggest fuel retailer by value, customer touch points and capacity. The policy will be renewed for another year effective October 1.
Indian Oil had opened a tendering process for this annual policy in July where a dozen public and private sector insurance companies had sent in expressions of interest.
But after more than two months of waiting and numerous letters seeking a timeline for completion of the process, insurance companies were verbally told the tender process has been scrapped.
Later, on September 20, Indian Oil issued a letter of award renewing its policy with New India «on the same terms and conditions as per the tender terms» at an increased premium of ₹292 crore, up from the ₹253 crore the company paid last year.
Separate emails sent to an Indian Oil spokesperson, its chairman SM Vaidya and CFO Sanjay Kaushal five days ago remained unanswered until the publication of this report. New India chairperson Neerja Kapur did not respond to ET's mail seeking comment.
«As a reinsurer, we worked with a local insurance company that, we understand, complied with all the local requirements,» Chubb said in a statement in response to ET's queries
New India has been given a 65% policy share, which some executives described as 'disproportionate'.
