Business Daily from THE HINDU group of publications
Sunday, Feb 24, 2008
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Business Daily from THE HINDU group of publications Sunday, Feb 24, 2008 ePaper | Mobile/PDA Version |
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Insurance Money & Banking - Alliances & Joint Ventures Global players keen to firm up insurance partnerships
Radhika Menon
Mumbai, Feb. 23 A number of global insurers who have been keenly studying the Indian market are now expected to firm up joint ventures with Indian companies in the next three to six months. US health insurers Aetna and Cigna and UK-based company Bupa are interested in setting up stand-alone health insurance companies, said a senior official with an international consultancy firm. American company Ace and Germany-based Talanx are looking at entering both the life and non-life sectors, while US-based Liberty Mutual and Travelers Group are interested in the non-life sectors, said the official. “The health insurers have so far been waiting in the wings as until 2007 health insurance was loss-making under the tariff regime. This is because the health portfolio of corporates was cross subsidised with the more lucrative fire insurance which was under tariff,” said the official. Some players are looking at following an innovative Third Party Administrator model, prevalent in other international markets. “In this model, the third party administrator offers products and manages a corporation’s funds. It networks with hospitals and negotiates with health providers while the risks remain on the company’s books,” said Mr Samir Bali, Partner, Ernst & Young. US based Aetna is a 158-year old company whose total revenues for the calendar year 2007 stood at $27.6 billion and net income at $1.8 billion. CIGNA, which is primarily a health insurer, also provides life, accident, health and expatriate employee benefits insurance coverage in a few international markets. In India, there are currently only two stand-alone health insurance providers — Star Health and Allied Insurance and Apollo DKV Insurance Company. Pact with L&T?Travelers is a big underwriter of property and casualty insurance in the US. It is in fact on the verge of signing an agreement with Indian engineering major L&T. It reported a net written premium of $21.1 billion in 2006. Among the other global players, Ace is a leading global commercial property and casualty insurance group. “The penetration of insurance in India remains low. There is plenty of scope for more players. These global players have very specialised products that are tailor-made to suit specific segments,” said Mr Tarun Bhatia, Head, Financial Sector Ratings, CRISIL. The penetration of insurance in India as a percentage of GDP stands at 4.8 per cent. Of this, life insurance accounts for 4.1 per cent and non-life insurance stands at 0.6 per cent. Insurance Bill unlikely this session Private insurers nudge for higher FDI cap Munich Re keen on India ventures More Stories on : Insurance | Alliances & Joint Ventures
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