The Videocon Group is all set to enter the general insurance business in India. The company plans to setup the business in a joint venture with Liberty Mutual and is expected to complete this alliance soon.
The general insurance space in India currently has 24 players out which 22 of them cater to the retail consumers. Agricultural Insurance Company and Export Credit Guarantee Corporation are the 2 niche players catering to specific requirements. The market is extremely competitive with a large majority of business being cornered by the public sector insurance companies. The private general insurance companies have gradually eaten increased their market share but the market is so competitive that the increase in market share is usually at the cost of profits. Most general insurance companies operate on losses in their core business but make some profit through their investment income.
The new company would be jointly held by Videocon Group having 74% and Liberty Mutual holding the remaining 26% which is the upper limit as per the regulatory guidelines for foreign ownership in insurance businesses in India. The company would cater to the retail products like health insurance and motor insurance which are seeing intense competition and increased volumes. The company will also launch personal accident insurance and home insurance products.
The Videocon Group is an established group in India with presence in consumer electronics goods, DTH, telecom and a few other business lines. Liberty Mutual is a US based company headquartered in Boston and is diversified global insurer.