Muthoot Finance

Topic: Enter into Insurance products

By Deepak Venkata, IIM Kozhikode.

Scope for Muthoot to start an Insurance manufacturing company?

The companys stock is currently trading at a price-to-book ratio of 0.9 and its RoA currently stands at 4%. Compared to similar other companies trading at a price-to-book ratios over 2, Muthoot has a good stand and hence, I think right now, experimenting through diversification is a good strategy for Muthoot and hence, it can start an Insurance manufacturing company now.

How to market / start the marketing and sale of the products to our existing and potential customers?

In India, a lot of people buy gold jewelry for the baby, but later sell it when the baby grows up and reaches school stage. This is one of the segments that can reap profits. Targeting this segment with a strategy of providing Health Insurance to the child in exchange to the gold that is being wasted. Providing an exclusive online portal system for this Child Health Insurance scheme should work.

Study on the existing insurance players, their sales strategy, business model, profitability?

UIICL is implementing an expansion strategy this year. It has set its target to open 530 new offices throughout India. By signing an MoU with ICSI, New India assurance is about to provide an online portal for health insurance to its institute members. So, to summarize the players and their strategies, a lot of firms are about to expand.

This Idea or strategy can, I believe bring a good transformation and provide growth in the present scenario of Muthoot Finances business.

Thank You