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

2 days ago

BGR Energy secures Rs 250 crore order

Oct 20 2014 8:36am CDT | Source: Business Standard

BGR Energy Systems Limited, a leading EPC and BoP company has received orders worth Rs 250 crore in the electrical sub-stations segment of its Electrical Projects Divison. Chennai-based BGR Energy's Electrical Projects Division (EPD) ...
Source: Business Standard   Full article at: Business Standard
 

 
Update
9

2 weeks ago

CSK vs KKR LIVE: Chennai opt to field against Kolkata in CLT20 final

Oct 4 2014 8:25am CDT | Source: HeadlinesToday.in

Chennai Super Kings clearly have some advantage following the ban on Kolkata Knight Riders' Sunil Narine in the ...
Source: HeadlinesToday.in   Full article at: HeadlinesToday.in
 

 
Update
8

3 weeks ago

Strides, Shasun announce merger; to create Rs 2,500 cr entity

Sep 29 2014 5:46am CDT | Source: Business Standard

In another instance of consolidation in Indian pharma sector, Strides Arcolab and Chennai-based Shasun Pharmaceuticals today announced their merger that will create an entity among the top 15 listed domestic drug makers with ...
Source: Business Standard   Full article at: Business Standard
 

 
Update
7

3 weeks ago

Hyderabad realty to look up in 2-3 quarters

Sep 26 2014 10:15am CDT | Source: Business Standard

Prolonged uncertainty over the bifurcation of the state saw investors move to the neighbouring Chennai and Bangalore markets t ...
Source: Business Standard   Full article at: Business Standard
 

 
Update
6

4 weeks ago

Open communication is Polaris' new offering

Sep 24 2014 12:00pm CDT | Source: Business Standard

The Chennai-based company eyes the $6-billion market for Enterprise Social Network (ESN) solutions with its new ...
Source: Business Standard   Full article at: Business Standard
 

 
Update
4

4 weeks ago

TVS Motor: Strong on volume growth, margins a concern

Sep 22 2014 9:24am CDT | Source: Business Standard

The sixfold rise in the TVS Motor Company stock---from Rs 30 in September 2013 to Rs 219 now ---has its roots in events last year. After nearly three years of a slowdown in new launches, the Chennai-based TVS stepped up the pace of bringing out new ... ...
Source: Business Standard   Full article at: Business Standard
 

 
Update
3

6 weeks 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 g ...
Source: Business Standard   Full article at: Business Standard
 

 
Update
2

6 weeks 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 the contract ...
Source: Business Standard   Full article at: Business Standard
 

 
Update
1

7 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 wi ...
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

Ukraine lacks sufficient gas for winter
Kiev, Oct 23 (IANS) Ukrainian Prime Minister Arseny Yatsenyuk has said his country lacks sufficient natural gas for winter.
 
 
Obama 'cautiously optimistic' about Ebola
Washington, Oct 23 (IANS) President Barack Obama Wednesday said he is "cautiously optimistic" about the Ebola situation in the US, as his government announced a new programme that will actively monitor for 21 days every person coming from West African nations hit by the deadly virus.
 
 
Khamenei wants less reliance on oil
Tehran, Oct 23 (IANS) Iran's Supreme Leader Ayatollah Ali Khamenei called on the country's officials Wednesday to formulate plans to cut Iran's dependence on oil revenues and manage the economy on the basis of the domestic capabilities.
 
 
Nigerian parliament approves $1 bn loan to fight Boko Haram
Lagos, Oct 23 (IANS) The Nigerian House of Representatives Wednesday approved President Goodluck Jonathan's request to borrow not more than one billion dollars to tackle the security challenges facing the country.
 
 
 

Latest from the Network

European Champions League standings
Paris, Oct 22 (IANS) Following are the European Champions League standings for Groups E to H after Tuesday's matches (tabulated under matches played, won, drawn, lost, goals for, against, points), according to Xinhua...
Read more on Sport Balla
 
Rogerio set to break Giggs world record
Rio de Janeiro, Oct 22 (IANS) Sao Paulo goalkeeper Rogerio Ceni is one victory away from earning his fourth Guinness World Record by eclipsing a mark held by Manchester United legend Ryan Giggs. The 41-year-old will...
Read more on Sport Balla
 
Ryan Reynolds can't keep his hands off Blake Lively
Ryan Reynolds was ''really sweet'' to Blake Lively at the Angel City Ball. The couple, who got married in September 2012, made their first red carpet appearance together in New York City on Monday night (10.20.14) since...
Read more on Celebrity Balla
 
Kris Jenner doesn't know who Bruce Jenner is dating
Kris Jenner has ''no idea'' whether Bruce Jenner is dating her best friend. The 58-year-old reality TV star, who split from the Olympic gold medallist last October after 23 years of marriage, claims she doesn't know if...
Read more on Celebrity Balla
 
When Rihanna dressed like 'Harry Potter'
New York, Oct 22 (IANS) Singer Rihanna was spotted here in a Harry Potter style costume. She wore the wizard-like get-up while heading for a business meal here Monday, reports mirror.co.uk. The 26-year-old combined a...
Read more on Celebrity Balla
 
Germany raises humanitarian aid to Iraq
Berlin, Oct 22 (IANS) Germany has pledged a further 20 million euros (about 25.5 million dollars) in humanitarian aid to Iraq, the foreign ministry said in a statement Tuesday. The additional funds are immediately...
Read more on Politics Balla
 
India calls on Israel, Palestine to resume peace process
United Nations, Oct 22 (IANS) India has called upon Israelis and Palestinians to resume the peace process as "dialogue remains the only viable option" to address the issues confronting the region. In a brief statement...
Read more on Politics Balla
 
Airstrikes help ground forces fight IS: Pentagon
Washington, Oct 22 (IANS) Kurdish forces are in control of the majority of the Syrian city of Kobane despite efforts by the Islamic State (IS) to take the town, a spokesperson for US defence department said Tuesday....
Read more on Politics Balla
 
Palestine, Israel urged at UN to halt unilateral initiatives
United Nations, Oct 22 (IANS) UN Secretary-General Ban Ki- moon Tuesday called on Palestine and Israel to overcome differences and halt unilateral initiatives that fuel mistrust, so as to pursue long-term stability in...
Read more on Politics Balla
 
China urges Israel to create conditions for peace
United Nations, Oct 22 (IANS) Chinese government has called on Israel to create necessary conditions for the resumption of peace talks with Palestine. At an open debate of the Security Council on the situation of the...
Read more on Politics Balla