The Rs. 3,810 crore Bajaj Auto has finalized its plans to venture into the non-life insurance business alone. The company is expected to submit its application for a licence to the IRDA early next week. The company is understood to be looking at its 400-strong dealer network, of which a substantial number also deal in four-wheelers, to tap into the auto insurance market.

Bajaj is the second company to venture alone into the non-life insurance business. The other-Reliance Industries, one of the early applicants – has already put in an application for life as well as non-life business.

According to sources. Bajaj Auto is planning to set up the non-life company with a start-up capital of Rs. 110 crore. Unlike other prospective entrants into the non-life business who plan to tap corporates to grab market share in the initial years. Bajaj Auto’s plan is to focus on the retail segment, although motor insurance is a loss-making portfolio for the general insurance industry. While the third-party losses in heavy commercial vehicles give the biggest blow, private vehicles are seen, by and large to be profitable.

Bajaj Auto has sold a total of 2.55 lakh motorcycles and 69,192 scooters for the year ended March ’00. The dealers on behalf of the customers usually purchase the first of the policies for new vehicles. This will ensure a captive base for the company. In addition to this captive market, the company will look at other personal lines of insurance such as health insurance.

With a stockpile of over Rs. 2,500 crore in surplus cash and a net profit of Rs. 613 crore, the company is among those best placed to get into the capital intensive insurance business. Bajaj also has a presence in the financial services sector through its auto finance arm - Bajaj Auto Finance. The company has assets over Rs. 400 crore.