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

10 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
10

3 days 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 ...
Source: Business Standard   Full article at: Business Standard
 

 
Update
9

2 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 ...
Source: Business Standard   Full article at: Business Standard
 

 
Update
8

2 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 cur ...
Source: Business Standard   Full article at: Business Standard
 

 
Update
7

3 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 ...
Source: HeadlinesToday.in   Full article at: HeadlinesToday.in
 

 
Update
6

3 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 b ...
Source: Business Today   Full article at: Business Today
 

 
Update
4

4 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, Baj ...
Source: Business Standard   Full article at: Business Standard
 

 
Update
3

6 weeks ago

South Africa's Sanlam might raise stake in Shriram's insurance biz

Jul 17 2014 1:48pm CDT | Source: Business Standard

South African financial services group Sanlam is in talks with the Rs 60,000-crore Shriram Group to raise stake in the Chennai-based company's life and non-life insurance businesses.Shriram Life Insurance Company is a venture of ...
Source: Business Standard   Full article at: Business Standard
 

 
Update
2

6 weeks ago

Parveen Travels in talks with private equity firms to raise Rs 250 crore

Jul 16 2014 6:56am CDT | Source: Business Standard

Parveen Travels Pvt Ltd, one of the largest fleet operators based in Chennai, is planning to raise around Rs 250 crore from private equity firms ...
Source: Business Standard   Full article at: Business Standard
 

 
Update
1

6 weeks ago

Orchid Pharma promoters to up by stake by 13 %

Jul 14 2014 9:18am CDT | Source: Business Standard

Promoters of Chennai-based Orchid Chemicals & Pharmaceuticals Ltd to increase their stake to 45 per cent. Today's company's Board of Directors has approved the issue of shares to Promoters on a preferentia ...
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

Glucose by-product damages 'good' cholesterol
London, Sep 1 (IANS) In developments which could lead scientists to hunt for new drugs to fight heart diseases, researchers have discovered that a substance formed from glucose in the body turns "good" cholesterol into "bad", increasing risk of heart diseases.
 
 
Pakistan protesters break into PTV office
Islamabad, Sep 1 (IANS) Protesters Monday took over the Pakistan Television (PTV) network office here, as a result of which transmission has disrupted in Islamabad.
 
 
Green offices make workers happy - and productive
London, Sep 1 (IANS) Want to be happy and productive at work? Keep a plant next to your computer.
 
 
Special team in PMO will fast-track Japanese investment: Modi (Roundup)
Tokyo, Sep 1 (IANS) Assuring the same quick reaction and proactive response a Japanese investor accorded when he was chief minister of Gujarat, Prime Minister Narendra Modi Monday announced a special team in his office to fast-track investments from Japan.
 
 
 

Latest from the Network

Glucose by-product damages 'good' cholesterol
London, Sep 1 (IANS) In developments which could lead scientists to hunt for new drugs to fight heart diseases, researchers have discovered that a substance formed from glucose in the body turns "good" cholesterol into...
Read more on Apple Balla
 
Robinho recalled to Brazil squad
Rio de Janeiro, Sep 1 (IANS) Brazil coach Dunga has handed an international recall to former Real Madrid striker Robinho for football friendlies against Colombia and Ecuador. The 30-year-old replaces forward Hulk, who...
Read more on Sport Balla
 
Pakistan protesters break into PTV office
Islamabad, Sep 1 (IANS) Protesters Monday took over the Pakistan Television (PTV) network office here, as a result of which transmission has disrupted in Islamabad. The protesters, who seemed to have faced no security...
Read more on Ad Balla
 
Jennifer Lawrence's nude photos leaked online
Los Angeles, Sep 1 (IANS) Actress Jennifer Lawrence's nude photographs are being circulated on the internet space after her phone was reportedly hacked. "This is a flagrant violation of privacy," a spokesperson for...
Read more on Celebrity Balla
 
Chanderpaul, Jeffers amongst runs in warm-up against Bangladesh
Basseterre (St. Kitts), Sep 1 (IANS/CMC) Shivnarine Chanderpaul warmed up for next week's first Test with a fluent, unbeaten half-century but Shane Jeffers took centrestage with a stunning century, on the second day of...
Read more on Sport Balla
 
Peng Shuai reaches US Open quarters for first time
New York, Sep 1 (IANS) World No.39 Peng Shuai of China defeated Lucie Safarova of the Czech Republic 6-3, 6-4 to reach the US Open quarter-finals, marking her first women's singles final eight appearance in a Grand...
Read more on Sport Balla
 
Green offices make workers happy - and productive
London, Sep 1 (IANS) Want to be happy and productive at work? Keep a plant next to your computer. "Green" offices with plants make staff happier and more productive than "lean" designs stripped of greenery, new...
Read more on Celebrity Balla
 
Special team in PMO will fast-track Japanese investment: Modi (Roundup)
Tokyo, Sep 1 (IANS) Assuring the same quick reaction and proactive response a Japanese investor accorded when he was chief minister of Gujarat, Prime Minister Narendra Modi Monday announced a special team in his office...
Read more on Politics Balla
 
Thompson, Stewart sweep 100 metres at Berlin meet
Berlin, Sep 1 (IANS/CMC) Trinidadian Richard Thompson won the men's 100 metres at the ISTAF athletics meet here as the Caribbean swept both sprints. Thompson, a double silver medallist at the Beijing Olympics six...
Read more on Sport Balla
 
Roger Moore loves being known as James Bond
Sir Roger Moore says there is ''no downside'' to being known as James Bond. The 86-year-old actor played the fictional British spy seven times between 1973 and 1985 in movies like 'The Man With the Golden Gun' and 'For...
Read more on Movie Balla