UK firm becomes first foreign promoter to do so after FDI hike in insurance
Foreign promoter Bupa will raise its stake in the standalone health insurance joint venture Max Bupa Health Insurance to 49% from 26% once the Insurance Laws Amendment Ordinance 2014 gets approved during the BudgetSession of Parliament 2015, becoming the first company to do so.
Bupa, the international healthcare group, will submit formal applications to the relevant authorities for the regulatory approvals required in order to increase its stake, the company said in a release.
“This decision underlines Bupa’s commitment to the Indian health insurance market and represents a major milestone in the development of Max Bupa. With our partners Max India, we are committed to supporting Max Bupa’s growth and helping Indian consumers live healthier and more successful lives,” said David Fletcher, managing director of International Development Markets at Bupa.
“As Max Bupa prepares itself for its next wave of growth, it will stand to benefit from Bupa’s expertise in areas such as under-writing health risks andproduct innovation,” said Rahul Khosla, Max India’s managing director. The company is a joint venture between Max India and UK-based Bupa.
Max Bupa has a paid-up capital . `504 crore at the end of March 31, 2013. Health insurance in India is the fastest growing segment in insurance. There are six standalone health insurance companies, with Birla MMI Holdings being the latest entrant into the business.
Many life and non-life insurance companies need capital to grow their business. The regulator, Insurance Regulatory and Development Authority, has estimated anadditional capital need of .
`44,500 crore in the life insurance, and .
`10,500 crore in the nonlife insurance sector over the next five years.
`12,606-crore domestic health insurance business accounts for about a quarter of the total non-life insurance business in the country. Penetration of the insurance industry has grown at a steady pace since non-state companies were allowed in 2000.
Penetration, defined as the ratio of insurance premiums to GDP, was 2.71% at the time.
Source : Economic Times
Date : 06/01/2015