The Hindu Business Line : India Inc binges on insurance biz for boom

Insurance seems to bethe latest buzzword for Indian firms, with a flurry of announcements in the sector this year. Four major corporate houses have already announced plans to enter the segment in the coming months. Among them are big names such as Ranbaxy, Bharti, Pantaloon and BILT.

Ranbaxy promoter group company Religare, which on Friday joined hands with Dutch insurance group Aegon to step into the domestic life insurance market, is looking to start operations by the first quarter of the next fiscal. The firm is yet to finalise the shareholding pattern of this venture, which is expected to see participation from a third partner. "We are looking to bring in one or two more financial partners for value addition in the distribution of products," Mr Sunil Godhwani, CEO and Managing Director, Religare, said. These partners will, however, be minority stakeholders.

Tremendous opportunities

According to Mr Malvinder Mohan Singh, CEO of Ranbaxy, the company sees a tremendous opportunity in the domestic financial services sector and is focused on this sector along with pharmaceuticals and health-care delivery.

Earlier this year, Pantaloon Retail India announced a tie-up with Italy-based Generali to set up separate entities for life insurance and general insurance businesses.

The Bharti Group, meanwhile, is all set to foray into the life insurance segment in a tie-up with the world's second largest life insurance player AXA. It plans to invest at least Rs 600 crore in the business over the next four years, with the venture poised to take off in just a month's time.

Other Indian companies have, in recent months, also indicated plans to tap this fast-growing segment. Ballarpur Industries, for instance, has evinced interest to enter this sector and is believed to be in talks with foreign players.

Growth rate of 15-20%

The reasons for this upsurge are not difficult to figure out. The domestic insurance sector is fast evolving and growing at a healthy rate of 15-20 per cent per annum. "For instance, while a country like the Netherlands has around 150 insurance players, the number in India is only about 15", Mr Godhwani said.

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