Even as ING exited the Indian insurance sector by selling off its 26% stake in ING Vysya Life insurance to Exide industries, a number of foreign players are waiting to enter India. The latest aspirant is Samsung Life Insurance, South Korea’s largest insurance company. It is in talks with DLF Pramerica Life Insurance to buy Pramerica’s 26% stake in the insurance joint venture.
Samsung Life has strong presence across Asia excluding the Indian market. Its underwritten premium (excluding corporate pension) stood at 12.05 trillion KRW –South Korean Won or approximately Rs 58,000 crores during the six months ended November 2012, a growth of 25.4% over the same period last year.
Although, Samsung Life has a representative office in Mumbai, company has not yet begun any activities in its Mumbai office.
DLF Pramerica Life is a 74:26 joint venture between DLF and U.S.A. based Prudential International Insurance Holdings, a wholly-owned subsidiary of Prudential Financial. Pramerica is the trade name used by Prudential Financial. During April-January period, DLF Pramerica Life’s new premium stood at Rs 96.84 crores as against Rs 67.39 crores in corresponding period last year, a growth of 43.7%.
Samsung Life is in talks simultaneously with other JV partners too such as Bharti AXA to acquire the 26% stake owned by AXA in the JV.
Prominent insurance players from South Korea, Japan and other Asian nations are actively looking to expand their presence in India. At a time when some partners in JV insurance firms are looking to exit, this means positive news for these foreign players and consumers as a whole.
Asian insurance giants such as Mitsui Sumitomo and Nippon Life have already set up their presence in India through buyouts. In May 2011, Japanese insurer, Nippon Life had picked up 26% stake in Reliance Life. For around Rs 3,000 crores, while another Japanese insurer Mitsui Sumitomo had acquired 26% stake in Max New York Life for Rs 2,731 crores in 2012.
Experts believe that this is an appropriate time to enter the insurance industry since the Indian insurance market is an evolving market, at least 8-10 years will be required to break even and if foreign companies have long term strategy in their mind then it is a good idea to enter.
India has a much better market than many other countries in the world. Foreign players entering the market with a long term view mean good news for industry.