Straight from the Specialists
(Any opinions expressed here are those of the author and not of Thomson Reuters)
Global insurers have been participating in the Indian insurance market for nearly 12 years. We may soon see the trend reversing.
The Insurance Regulatory and Development Authority (IRDA), the country’s insurance regulator, has laid down rules for Indian companies to start overseas operations. The criteria being: net worth of 5 billion rupees for life insurance companies, 2.5 billion rupees for general insurance companies and 7.5 billion rupees for re-insurance companies. In addition, the companies should have made a profit in at least three of the last five years.
The profit criterion rules out a large number of private insurance companies in India for now. It must also be noted that most private insurance companies in India – both in the life and general insurance space – were set up in partnership with global insurers. So they would not want competition in countries where their partners are already operational.
(The views expressed in this column are the author’s own and do not represent those of Reuters)
The Life Insurance Corporation of India (LIC) has again come to the rescue of the industry in the financial year ending July 2012. While 23 private players together have a marginal dip in business (-1 pct), LIC has powered ahead with 23 pct growth in new business premium collection.