Mumbai:
Nearly a dozen Indian banks are planning to enter the
life and non-life insurance sectors, attracted by the
explosive growth of the insurance industry, especially
'bancassurance.'
International
insurance majors are also vying to tie-up with leading
nationalised banks. Some of the banks, like Union Bank
of India, are being wooed by multiple players, eager to
rope in state-owned unit for their insurance forays.
At
least four companies are learnt to be keen on taking on
Union Bank as a partner. They include Japan's Dai-Ichi
Mutual Life Insurance, which has tied up with Bank of
India (BoI), Italian insurer Generali, which has tied
up with the Pantaloon group; Germany's Ergo Insurance;
and even Bharti Axa Life Insurance, which has already
started operations.
Telecommunications
giant Bharti, which has a 74-per cent stake in the new
venture, while French partner Axa has the rest, has to
sell off a part of its stake in due course. Getting a
bank like Union Bank will help it in increasing market
penetration. Union Bank is also on the look out for a
26 per cent stake in a life insurance venture.
Dai-Ichi
had roped in BoI and Andhra Bank for its insurance venture
in India, but the latter walked out of the arrangement
as it did not want to be a junior partner and wanted more
than 23-per cent stake that was being offered.
The
Insurance Regulatory and Development Authority (IRDA)
has imposed a 49-per cent ceiling on a bank's equity stake
in an insurance company, while there is a 26-per cent
limit on foreign equity. Most Indian banks are reluctant
to be junior partners in the venture, with a mere 26-per
cent holding.
BoI
and Union Bank already have an alliance covering loan
syndication, international banking and training. But it
is still not clear whether Union Bank would agree to a
lower stake than BoI in the insurance venture with Dai-Ichi.
A
similar arrangement involving two banks (one large and
the other a regional player) and an international insurer
has just taken off. IDBI Bank has inked a deal with Federal
Bank and Fortis, to start a new life insurance company.
IDBI Bank will have a 48-per cent stake, and Federal Bank
and Fortis 26 per cent each.
Other
leading banks keen to enter the business include Bank
of Baroda, Canara Bank, Punjab National Bank (PNB), and
Oriental Bank of Commerce. PNB has tied up with UK-based
major Principal and Vijaya Bank, while the other banks
are finalising their partners.
Three
banks - Allahabad Bank, Karnataka Bank and Indian Overseas
Bank - have tied up with Japan's Sompo Insurance and the
Dabur group, to float a non-life insurance company.
The Indian insurance sector has grown phenomenally. In
the first half of the current fiscal with new premium
income of the 16 insurers
ballooning by 162 per cent to almost Rs30,000 crore. The
dozen non-life insurance players saw a modest 23 per cent
growth in premium (to Rs12,400 crore), though the business
is expected to expand rapidly from next year, following
'detariffication.'
|