Insurance broking business likely to revive

09 November 2006

The introduction of a de-tariffied regime in the non-life insurance sector in India from next year has resulted in growing interest in the broking business.

Manappuram General Finance & Leasing Ltd, a Rs400 crore, Kerala-based group (which is also listed on the Bombay Stock Exchange), is the latest to have entered the business. Manappuram yesterday announced that the Insurance Regulatory and Development Authority (IRDA) had given it an insurance broking license.

The new subsidiary, Manappuram Insurance Brokers, will carry out broking operations, both in the life and non-life business.

A few weeks earlier, the Enam Financial group had announced the launch of Enam Insurance Broker Pvt Ltd, to offer insurance products to corporates and individuals, both in the life and non-life segments.

Internationally, insurance brokers focus on corporate and non-life insurance business, leaving the retail and life business to agents. However, brokers in India had to cater to both the retail and life business, because of virtual stagnation in the non-life sector. Non-life tariffs are decided by a committee, and insurance companies are not allowed to tinker with the premiums.