Foreign Companies eying Indian Insurance Business

According to the sources from insurance industry, many prominent insurance companies from South East Asian countries like, South Korea, Japan etc is planning to enter in to Indian market for insurance business. Also in past, many giant insurance companies like Nippon Life and Mitsui Sumitomo have established themselves in India by purchasing shares of Reliance Life and Max New York Life Insurance respectively.
South Korea’s giant, Samsung Life Insurance, one of the largest insurance companies in South Korea, is in talk with DLF – Pramerica to buy 26% shares in the insurance joint venture to enter into Indian insurance business. Other than DLF – Pramerica, Samsung is also intending to enter into joint venture partnership with Bharati AXA by purchasing 26% shares in the company.
Samsung Life, with an underwritten premium (excluding corporate pension) of 12.05 trillion KRW-South Korean Won (approximately Rs 58,000 crore) during the six months ended November 2012, has strong presence across Asia, excluding the Indian market. Samsung has registered a 25.4 % growth in six months, compared to the same period in 2011.
DLF-Pramerica is a 74:26 joint venture between DLF and American insurer Prudential International Insurance Holdings, a wholly-owned subsidiary of Prudential Financial. Pramerica is the trade name used by Prudential Financial. When contacted, the company declined to comment on the same.
Although Samsung Life Insurance has a representative office in Mumbai, according to industry insiders, the company has not yet begun any activities in its Mumbai office. Repeated attempts to reach Samsung Life Insurance proved futile as no company spokesperson was available, neither in India nor its headquarters in Seoul, South Korea.
Even as ING exited the Indian Insurance sector b y selling off its 26% stake in the Joint Venture (JV) ING Vysya Life Insurance to partner Exide Industries, a number of players waiting in the wings to enter Indian insurance market is a positive sign for the growth of the consumer and the industry at the whole.
Hira Sadhak, former chief executive officer of LIC Pension Fund and advisor-markets and industries at Pricewaterhouse-Coopers, said, “It is an opportune time to enter the insurance industry. Since the Indian insurance market is an evolving market, at least eight to 10 years will be required to break even. If companies from abroad have a long-term strategy in their mind, then it is a good idea to enter.”