Kolkata-headquartered Magma Fincorp Ltd said its Germany-based general insurance partner HDI-Gerling would increase its stake to up to 49 per cent once the recent amendments to the Insurance Bill gets implemented.
Jens H. Wohlthat, member of the executive board of HDI-Gerling, said: “When there is a possibility of increasing our stake to 49 pert cent, we will immediately carry that out. We made (such) a provision in our joint venture contract.”
Announcing the business plans of Magma HDI General Insurance Co Ltd (MHDI), Swaraj Krishnan, Chief Executive Officer, said nearly 75 per cent of the company’s products would be on motor insurance.
The joint venture between Magma Fincorp and HDI-Gerling was signed in July 2009.
The company received the R3 licence from IRDA in May, Krishnan said. This approval allows any insurance company to start operations.
With a paid-up capital of Rs 100 crore, the general insurance company was set up at an initial investment of Rs 208 crore. Magma Fincorp holds 74 per cent stake in MHDI.
Asked whether the company would foray into banking, Krishnan said MHDI was contemplating over tying up with regional rural banks.
According to Krishnan, the company will take some more time to launch its health insurance products.
“Our health products will be launched over the next two-three months. We are a little wary of launching these products, unless the service delivery network is set up properly,” he said.
More than 80 per cent of the company’s market is in the rural and semi-urban parts of the country. These areas, Krishnan said, lack proper healthcare facilities to support the service network for health insurance products.