The Hindu Business Line : Bank of India, Union Bank, Dai-Ichi sign MoU for life insurance venture

Bank of India (BoI), Union Bank of India (UBI) and Dai-Ichi Mutual Life Insurance Co on Thursday forged an alliance to form a new life insurance joint venture company.

While Bank of India would hold 51 per cent stake in the three-way life insurance venture, Dai-Ichi Mutual Life Insurance of Japan and UBI would hold 26 per cent and 23 per cent, respectively, in the company, which is yet to be named.

A Memorandum of Understanding (MoU) to this effect was exchanged between the representatives of the three partners in the presence of the Union Finance Minister, Mr P. Chidambaram, here on Thursday.

First from Japan

Dai-Ichi Life is the second largest insurer in Japan and the sixth largest in the world. Mr K. Iki, Director and Senior Managing Executive Officer, Dai-Ichi Life, said that the company was the first life insurance entity from Japan to enter India. "We express our strong commitment to India as a long-term player," Mr Iki said.

Mr M. Balachandran, Chairman and Managing Director, BoI, later told Business Line that the joint venture company would have an initial paid-up capital of Rs 150 crore to start with.

Asked as to how UBI preferred to settle for 23 per cent stake in the venture, Mr M.V. Nair, Chairman and Managing Director of the bank, said that the MoU provides an opportunity for the bank to increase its stake to 26 per cent whenever the regulations for FDI would get changed and the FDI cap in insurance companies revised.

Huge opportunity

Meanwhile, speaking on the occasion, Mr Chidambaram highlighted that India presented a huge opportunity for insurance companies as the country was one of the most underinsured in the world and had 110 crore people as potential market.

The Finance Minister pointed out that the number of life insurance policies in the country were only 35 million. "Premium as a proportion of GDP stood at 2.53 per cent against the world average of 4.55 per cent. The insurance premium per-capita stood at $15.7 against the world average of $291.5," he said.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
ICICI Bank to raise $1 b yen loan

Pension fund investments: CMs' meet soon

Mobilising resources — Banking by innovation

Rupee gains on dollar inflows

PG diploma course in insurance

AP orders probe into Margadarsi

Bank of India, Union Bank, Dai-Ichi sign MoU for life insurance venture

`Most Indians lack cover against critical illnesses'

`RBI will aim to contain inflation at 5-5.5 pc '

Central Bank to distribute Tata Mutual's products

Kerala Power Finance pays 20% dividend

HDFC Bank hikes prime rate to 13.5%

Bond prices fall by 12 paise

IDBI, LIC to co-finance infrastructure projects

Co-branded card for truck owners

Kotak Mahindra deposit plans