8 july 20000

hindujas, bajaj auto and s kumars in line to join insurance bandwagon
mumbai: with the insurance regulatory and development authority (irda) only weeks away from accepting the first applications from prospective promoters for the insurance business, more private companies are joining the bandwagon.

the hinduja group is venturing into all three forms of insurance -- life, general and re-insurance. the group is said to be in the process of wrapping up deals with two-three different collaborators specialising in each of the three sectors. it is expected that the foreign partners, indusind bank ltd, the bank promoted by the group, will hold up to 20 per cent stake and the balance will be held by the group, subject the rbi guidelines.

cash-rich bajaj auto is said to be planning to enter the non-life insurance sector through a possible tieup with a foreign partner. although, bajaj auto has enough funds to set up an insurance company on its own and meet the growing capital requirements, it will require a foreign partner for the expertise. it is not yet clear whether the firm has decided on offering an equity stake to the foreign partner.

textile company, s kumars, which has recently entered into the internet arena, is looking at a three-way partnership and is reported to be in talks with jammu and kashmir bank as the second partner with a foreign insurance firm joining as the third partner.

almost all companies who have announced their intentions to get into insurance business have announced a tie-up or an intention to tie up with a foreign partner. the only exclusions to this are the reliance group (non-life and life insurance ) and kotak mahindra financial consultants (non-life insurance business). both these companies plan to set up 100 per cent subsidiaries.

among the prospective entrants, interest is keener in the life insurance segment as this is the business which has been driving premium growth world-wide. industry watchers expect a dozen players in life and a half of that in non-life when licences are finally issued.