360° Coverage : FDI hike in insurance won't change industry much: CEO Survey

9 Updates

FDI hike in insurance won't change industry much: CEO Survey

Dec 12 2012, 4:28am CST | by

Chennai, Dec 12 (IANS) Contrary to the general perception that the private life insurers are in favour of 49 percent foreign direct investment (FDI) in the sector, a good number of head honchos are less enthusiastic about it, reveals an survey by US-based global actuarial firm Milliman.

Chennai, Dec 12 — Contrary to the general perception that the private life insurers are in favour of 49 percent foreign direct investment (FDI) in the sector, a good number of head honchos are less...

Filed under: news

YouTube Videos

 
 
 

1 year ago

FDI hike in insurance won't change industry much: CEO Survey

Dec 12 2012, 4:28am CST | by

Chennai, Dec 12 (IANS) Contrary to the general perception that the private life insurers are in favour of 49 percent foreign direct investment (FDI) in the sector, a good number of head honchos are less enthusiastic about it, reveals an survey by US-based global actuarial firm Milliman.

Chennai, Dec 12 — Contrary to the general perception that the private life insurers are in favour of 49 percent foreign direct investment (FDI) in the sector, a good number of head honchos are less enthusiastic about it, reveals an survey by US-based global actuarial firm Milliman.

The survey also finds that the top executives feel that the sectoral regulator is right in penalising insurers not playing by rules.

According to the survey, three out of 11 chief executive officers (CEO) are of the view that the FDI stake increase from the current 26 percent to 49 percent will not change the status of the industry. Not giving a direct answer, two CEOs said the FDI hike may have a positive impact.

As to the reasons why they do not see any positive impact if the FDI hike happens, CEOs cited the lack of difference in performance of companies with or without foreign promoter having operational/management control.

Given this, there is no evidence to suggest that FDI at 49 percent would help the industry get the much needed domain expertise, the CEOs believe, states the survey.

According to some CEOs, the hike in FDI limit might result in infighting between Indian and foreign promoters as there is not much of a difference between a 26 percent and 49 percent foreign ownership structure in terms of operational/management influence.

Further, the officials said the industry does not have the avenues to deploy the additional capital.

On the other hand, those in favour of FDI hike say that it would enable cash strapped promoters to raise funds and may bring in more foreign companies to India.

"But the moot point is whether the proposed enhancement from the present 26 percent to 49 percent - that is an increase of mere 23 percent - will have any meaningful impact in terms of inflows of capital. To fund increasing needs of capital for any growing insurance company, it may desirable to go the whole hog and increase the FDI limit to a significant 76 percent instead of a half hearted 49 percent. This may also help to bring in significant foreign exchange inflows," K.K.Srinivasan, former member of Insurance Regulatory and Development Authority (IRDA) told IANS.

According to him, there is a flip side to this move. Entry of too many players in insurance is often responsible for unhealthy competition and resultant de-growth and poor profitability.

On the issue of IRDA penalising insurers not playing by the rules, some CEOs felt India is not ready for a principles based systems of regulations and in a rules based regimes companies have to follow them.

According to the survey, one life insurance CEO was of the view that the regulator should have started penalising deviant companies much earlier.

Several CEOs expressed that IRDA should examine why all companies are being non-compliant in certain areas- for example, commission to distributors.

The felt IRDA should recognise the business realities and allow companies to offer flexibility in paying compensation to distributors.

IANS

 
Update
9

1 week ago

Polaris aims at its own Facebook, albeit for corporates

Sep 9 2014 7:34am CDT | Source: Business Standard

Chennai-based company plans to take its enterprise social network platform, Octopus, to global market ...
Source: Business Standard   Full article at: Business Standard
 

 
Update
8

1 week ago

NLC talks fails, strike continues: labour leaders

Sep 8 2014 9:34am CDT | Source: Business Standard

Talks between the contract labours' organisations in Neyveli Lignite Corporation, the management and the Labour Department officials in Chennai to settle the issues of th ...
Source: Business Standard   Full article at: Business Standard
 

 
Update
7

2 weeks ago

CBI court extends judicial custody of Chennai RoC

Aug 28 2014 5:34am CDT | Source: Business Standard

A CBI Court here, has extended the custody of Registrar of Companies, Chennai, who was arrested for taking bribe of Rs 10 lakh from industrialist M A M Ramasamy of Chettinad Group.The Court has said it will take a decision on whether the Regist ...
Source: Business Standard   Full article at: Business Standard
 

 
Update
6

4 weeks ago

TVS looks to regain 3rd spot in bike, scooters segment

Aug 17 2014 12:54am CDT | Source: Business Standard

Chennai-based TVS Motor Company is targeting regaining the third position in the country's two-wheeler market on the back of new launches in t ...
Source: Business Standard   Full article at: Business Standard
 

 
Update
5

4 weeks ago

TVS looks to regain 3rd spot in bike, scooters segment

Aug 17 2014 12:15am CDT | Source: Business Standard

Chennai-based TVS Motor Company is targeting regaining the third position in the country's two-wheeler market on the back of new launches in the current f ...
Source: Business Standard   Full article at: Business Standard
 

 
Update
3

5 weeks ago

Man under observation for Ebola virus found healthy: Govt

Aug 10 2014 10:26pm CDT | Source: HeadlinesToday.in

The Department of Health, Government of Tamil Nadu, has informed the central government that a person had indeed landed at Chennai airport in Tamil Nadu from Guinea on August 9. He was checked for symp ...
Source: HeadlinesToday.in   Full article at: HeadlinesToday.in
 

 
Update
2

6 weeks ago

Roadshows for 5 per cent stake sell in SAIL to start month-end

Aug 4 2014 4:08am CDT | Source: Business Today

Domestic roadshows for the issue, in which around 20.65 crore shares of the government would be divested through Offer For Sale, or auction route, will be held in ...
Source: Business Today   Full article at: Business Today
 

 
Update
1

6 weeks ago

TVS steps up its two-wheeler challenge

Jul 31 2014 12:40pm CDT | Source: Business Standard

The Chennai-based company recently gained market share for the first time in two years; does it have the products to take on Hero, Bajaj an ...
Source: Business Standard   Full article at: Business Standard
 

 

Don't miss ...

 

<a href="/latest_stories/all/all/8" rel="author">Luigi Lugmayr</a>
Luigi is the founding Chief Editor of I4U News and brings over 15 years experience in the technology field to the ever evolving and exciting world of gadgets. He started I4U News back in 2000 and evolved it into vibrant technology magazine.
Luigi can be contacted directly at ml@i4u.com. Luigi posts regularly on LuigiMe.com about his experience running I4U.

 

blog comments powered by Disqus

Latest stories

Ebola epidemic spiraling out of control: Obama
Washington, Sep 17 (IANS) The Ebola epidemic in West Africa is "spiraling out of control" and posing a potential threat to global security, US President Barack Obama warned Tuesday.
 
 
NASA to make major announcement about spacecraft contracts
Washington, Sep 17 (IANS) US space agency NASA said Tuesday it will make a "major announcement" regarding the awarding of contracts to build commercial spaceships that will send the country's astronauts to space soil by 2017.
 
 
Chip in to enhance links, president tells Indians in Vietnam
Ho Chi Minh City, Sep 16 (IANS) The Indian diaspora in Vietnam can play a "significant role" as a "bridge" in deepening relations between the two countries, President Pranab Mukherjee said Tuesday.
 
 
Ho Chi Minh City's rise as economic hub marvellous: President
Ho Chi Minh City, Sep 16 (IANS) Lauding the perseverance and success of the people of Vietnam, President Pranab Mukherjee Tuesday expressed admiration at how Ho Chi Minh City has transformed into a prosperous regional economic hub.
 
 
 

Latest from the Network

Ebola epidemic spiraling out of control: Obama
Washington, Sep 17 (IANS) The Ebola epidemic in West Africa is "spiraling out of control" and posing a potential threat to global security, US President Barack Obama warned Tuesday. "If the outbreak is not stopped now...
Read more on Business Balla
 
My son has taught me about patience: Hilary Duff
Los Angeles, Sep 17 (IANS) Actress Hilary Duff can't really remember life without her two-year-old son Luca and says he has changed her completely. The "Chasing the sun" singer credits Luca, her son with estranged...
Read more on Celebrity Balla
 
Scottish minister insists of using pound even if gets independence
Edinburg, Sep 17 (IANS) Scottish First Minister Alex Salmond Tuesday insisted that an independent Scotland could not be prevented from using the pound. In an interview with Sky TV news, Salmond reiterated his desire...
Read more on Politics Balla
 
Portman 'honoured' to be face of Dior
Los Angeles, Sep 17 (IANS) Actress Natalie Portman says it is an "honour" to front campaigns for Dior and is constantly excited about working on new projects with the Parisian label. The "Black Swan" star, who has...
Read more on Celebrity Balla
 
Eva Mendes and Ryan Gosling cried after baby's birth
Eva Mendes and Ryan Gosling burst into tears after she gave birth to their daughter. The couple, who have been dating since September 2011, were reportedly overcome with emotion upon welcoming their first child into the...
Read more on Celebrity Balla
 
P Diddy buys $40 million LA mansion
P. Diddy has snapped up a new $40 million mansion. The rapper - real name Sean Combs - has reportedly closed escrow on a sprawling European-style villa in Holmby Hills, Los Angeles, close to where Michael Jackson died....
Read more on Celebrity Balla
 
Victoria Beckham's family will work in boutique
Victoria Beckham plans to get her family to work in her new boutique. The British fashion designer, who has four children, Brooklyn, 15, Romeo, 12, Cruz, nine, and Harper, three, with husband David Beckham, insists she...
Read more on Celebrity Balla
 
Snoop Dogg posts and deletes homophobic slur
Snoop Dogg allegedly posted a homophobic slur on Instagram and Twitter. The 'Sweat' hitmaker - real name Calvin Cordozar Broadus - reportedly shared a derogatory message alongside a photograph of two men lying in bed...
Read more on Celebrity Balla
 
US does not rule out sending ground troops to Iraq
Washington, Sep 17 (IANS) Martin Dempsey, chairman of the US Joint Chiefs of Staff said Tuesday that US ground troops could be called into battle against the Islamic State (IS) in Iraq and Syria if circumstances...
Read more on Politics Balla
 
69th session of UN General Assembly begins
United Nations, Sep 17 (IANS) The United Nations General Assembly (UNGA) started its 69th session at the UN Headquarters in New York Tuesday. Sam Kahamba Kutesa, Uganda's foreign minister who was elected president of...
Read more on Politics Balla