The Hindu Business Line : Kotak Old Life mulls raising capital by Rs 150 cr

Kotak Mahindra Old Mutual Life Insurance Ltd (KMOMLIL) plans to raise its capital by another Rs 150 crore next year in line with expanding business. Speaking to reporters here today the KMOMLIL Executive Director, Mr Pankaj Desai, said, "We are targeting premium accretion of Rs 1,200 crore in 2008."

KMOMLIL is currently capitalised at Rs 365 crore. KMOMLIL is a 74:26 joint venture between Kotak Mahindra group and Old Mutual of South Africa.

Premium Accretions

Mr Desai said during the current year, the company was likely to end with a premium of Rs 1,000 crore. New premium accretions were expected to be around Rs 445 crore during the period, he said.

However, he added that despite having a bouquet of 23 different insurance products, unit linked insurance products (ULIPs) continued to be favoured among both urban and rural life insurance customers. Even in ULIPs, the bias was in favour of growth funds, he added.

The capital guarantee product has so far generated returns of 31.4 per cent till December last year. Till March 15, the cumulative return on the product was 27.4 per cent, Mr Desai said. Investors' principal in this product was fully protected, though risks on the underlying investments would have to be assumed by them.

Another popular insurance product from KMOMLIL was the Dynamic Floor fund.

Mr Desai said that at least 18 per cent of Kotak's premiums came from the rural areas. In Karnataka, life insurers proposed opening new offices in Mysore, Mangalore, Hubli and Dharwad.