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Hyderabad, March 30 Global insurance majors are increasingly looking at the Indian market to foray or expand further, according to Mr C.S. Rao, Chairman, Insurance Regulatory and Development Authority (IRDA).

“Going by the pace of growth in life insurance, we expect that there will be more activity in the form of joint ventures between multinational insurance companies and their Indian counterparts,” Mr Rao told Business Line here.

IRDA has issued primary licences to three new joint ventures in life (Aegon Religare, Canara Bank-HSBC-OBC and DLF Primerica) and one in non-life (Bharti AXA). “This completes the second phase of interest of global players in our insurance sector. The third phase will now begin and there will be more action,” Mr Rao said.

At present, there are 41 players in insurance, including 21 in life sector, the LIC being the lone public sector firm. Private players now have 35 per cent market share.

The life segment is a major attraction for private players as the growth rate has been impressive. “Its growth is between 35 and 40 per cent. From Rs 10,000 crore first premium in 2001, it has gone up to Rs 86,381 crore in January 2008. This is enough to drive foreign players to India,” the IRDA Chairman said. Worldwide, the growth of the insurance industry (total premium volume) is at 2.5 per cent.

The regulator is also expecting more applications for licences over the next one/two years due to banks’ interest in insurance. (Andhra Bank-Legal and General-Bank of Baroda and Bank of India-Daichi-Union Bank of India ventures are likely to enter soon.)

The good returns from unit-linked insurance plans (ULIPS), non-saturation of urban markets, scope in districts and rural areas will drive further growth. “This will be an attractive proposition for new players to come in,” he observed.

On capital infusion by existing companies and new firms, Mr Rao said IRDA is not considering permitting any options other than the equity route. “We believe only equity route is healthy in the current scenario,” he said.

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