Five newcomers to enter insurance field by year-end
The insurance space is all set to see more competition. As many as five more may enter the market by the end of the year.
The more the merrier seems to be the catch-phrase the insurance sector is swearing by. Five players are raring to make their mark on the industry.
After its success with life insurance, State Bank of India will enter the non-life space, partnering Australia-based IAG. SBI is waiting for the second stage of regulatory approval.
Also waiting for second stage approval is a partnership between Bank of Baroda, Andhra Bank, and London-based financial services major Legal & General. They will jointly enter the life insurance sector.
Religare and re-insurer, Swiss Re recently announced a health insurance joint venture, expected to begin operations in 2010. The project will see capital infusion to the tune of Rs 500 crore.
Some of the new entrants may have no former exposure to the financial business. L&T has tied up with US-based commercial property underwriter Travelers. But these two are yet to formally sign the agreement.
FMCG-major Dabur may also throw its hat into the ring for the third time. Dabur already has a stake in Aviva Life and Universal Sompo, and is now partnering American insurance giant Liberty Mutual. However, this non-life venture recently hit a roadblock when insurance regulator IRDA raised concerns over the structure of the joint venture.
These new entrants have also sparked a churn in the industry.
Joydeep Roy, the former Chief Distribution Officer of Tata AIG Life, has been appointed CEO-designate of L&T Travelers. P Nandagopal, former CEO of Reliance Life, has been appointed CEO-designate at the JV between Bank of Baroda, Andhra Bank, and Legal & General. And SBI’s RR Belle has been named MD-designate at the SBI-IAG venture.
Sources say that many Indian banks which are already in the life insurance space are also scouting for foreign partners to enter the non-life segment. With foreign insurers eyeing the Indian insurance market for its resilience in the financial crisis, the sector is in for some interesting times.
