Insurers look for profits, investors for higher foreign stake

[Krypton]

While income grew faster than expected, most companies that have been in operation for seven-eight years missed the target to break even, as they focused on market share. Partly driven by the financial crisis and also because of capitalisation requirements, profit is the new buzzword for insurance companies.

Till now everybody is looking for larger premium share, not the customer retention.

While the management is pushing for profit, the promoters are eagerly awaiting passage of the Insurance Bill, which proposes to increase the ceiling on foreign investment to 49 per cent from 26 per cent fixed a decade ago. A higher foreign investment cap will help lower the burden on Indian promoters, as life insurance companies need to maintain a solvency margin of 1.5 times. So, for a business of Rs 100, they need to have Rs 150.

It will also bring in change in management from Indian Management to foreign management. God knows whether it will bring some big changes in insurance sales. So get ready for change.

[CONFUSED]

Till now everybody is looking for larger premium share, not the customer retention.

Please read this - "Private life insurers are focusing on rationalisation of sales force and consolidation of infrastructure. In addition, they are trying to retain old customers."
So here there is big shift.

[Krypton]

Thanks Confused! I might have overlooked that part, in such a long article.