Reliance General Insurance (RGI) has created a flutter in the domestic general insurance market by cornering the Rastriya Chemicals and Fertilisers (RCF) insurance portfolio quoting an almost 25% lower premium for the year 2006-07.

ICICI Lombard General Insurance, the no 1 private sector general insurance company, earlier serviced the RCF account for the last couple of years. ICICI Lomabard used to renew the account at over Rs 7.5 crore premium for the past two years. However, RGI, which has received a fresh thrust after being grouped into Anil Ambani’s R-ADAG fold, had bid for the account by undercutting the premium by 25 % during the latest renewal. RGI had insured RCF at over Rs 5 crore for 2006-07.

"Yes, it was a profitable account and the way it was taken away was a sort of body blow to us. But it is up to the client to decide with whom it wants to be insured," said officials at ICICI Lombard. However, other general insurers, particularly the public sector general insurance companies, have cried foul over the deal.

"This is nothing short of a breach of tariff and we would drag RGI to IRDA for the deal," said a senior official of New India Assurance, which was once servicing the account. "This kind of undercutting of premium is unethical and harms the smooth functioning of the market," he added. RGI officials could not be reached for comment on the issue.

The four state-owned general insurance companies have now decided to bid together for big accounts.

(www.financialexpress.com)