Sometime back in July 2012 we had written about the first
positive ripples of investment in the Insurance Sector. We had discussed about
the possibility of increasing the FDI investment cap from the erstwhile 26% to
49%. With the recent ongoing parliamentary discussions this possibility might
soon be a market changing reality for the Insurance Business. Though we have to
wait till November and hope for a smooth approval of this proposed reform, let’s
have a look at how the industry is impacted and what the industry experts have
to say on this:
Puneet Nanda , executive director ICICI Prudential : “Raising FDI cap will send positive signals to foreign investors and will encourage new players to enter the Indian insurance market. Increased competition will lead to the introduction of newer and lower-priced products and better service from insurance firms.”
Vibha Padalkar, executive director and chief financial officer, HDFC Life: “More companies will enter the sector because India is an underpenetrated country when it comes to life insurance products. Along with lower prices, customers will also see new products hitting the market”
Nathan Parnaby, CEO of Standard Life’s Asia and emerging markets division: “The Indian government and their finance minister are doing the right thing…We would like to look at the opportunity of increasing our stake”
[Standard Life holds 26% stake in HDFC Standard Life Insurance]
Louise Shield, an RSA spokeswoman: “We welcome the move, it’s a step in the right direction”
Puneet Nanda , executive director ICICI Prudential : “Raising FDI cap will send positive signals to foreign investors and will encourage new players to enter the Indian insurance market. Increased competition will lead to the introduction of newer and lower-priced products and better service from insurance firms.”
Vibha Padalkar, executive director and chief financial officer, HDFC Life: “More companies will enter the sector because India is an underpenetrated country when it comes to life insurance products. Along with lower prices, customers will also see new products hitting the market”
Nathan Parnaby, CEO of Standard Life’s Asia and emerging markets division: “The Indian government and their finance minister are doing the right thing…We would like to look at the opportunity of increasing our stake”
[Standard Life holds 26% stake in HDFC Standard Life Insurance]
Louise Shield, an RSA spokeswoman: “We welcome the move, it’s a step in the right direction”
[RSA holds 26% stake in Royal Sundaram Alliance]
Although RSA has not expressed any interest to increase
their stake in Royal Sundaram Alliance, others like Standard Life and
Prudential (currently having stake in ICICI Prudential) have expressed interest
to take advantage of this reform. As per market experts, Standard Life and
Prudential would need around 300 million pounds and 700 million pounds
respectively to increase their stakes to 49% in HDFC Life and ICICI respectively.
Although a 49% doesn't give any controlling stake to either of them, it induces
greater involvement and interest in business strategy, management and
implementation.
From every corner of the globe we are getting positive vibes about this proposed reform. Perhaps opening up FDI in Insurance is a great way to explore the full potential of a strong market as India. We certainly hope that this move is not thwarted by unreasonable political aspirations.
From every corner of the globe we are getting positive vibes about this proposed reform. Perhaps opening up FDI in Insurance is a great way to explore the full potential of a strong market as India. We certainly hope that this move is not thwarted by unreasonable political aspirations.
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