After the exit of New York Life from Indian insurance market, Dutch insurer Aegon could be the next one to exit.
Aegon operates in India through a joint venture, Aegon Religare life insurance Company, which commenced its operations in 2007. In the JV Religare Enterprises holds 44% stake, Bennett, Coleman and Company holds 30% stake and rest 26% stake is held by Aegon. As of 31 December 2011 promoters of company has invested Rs 1,075 crore in it.
Aegon has started looking at all options including the exit route, in the light of its inability to invest further in the business, considering the results till now and decreasing chances of increasing Foreign Direct Investment (FDI) cap in insurance from the present 26% to 49%.This problem is faced by more than half a dozen companies and this development might indicate larger sector phenomenon.
However, as per Aegon it has no plans to exit from its insurance joint venture with Religare in India. It also said that it is committed to Indian insurance market.
Market analyst cite that, Aegon Religare Life , a pioneer in the online insurance space in India, is struggling to keep operating and agency network expenses down to match with the premium collected.
Aegon Religare is at the bottom five out of 23 life insurance companies in India. During FY’12 company collected Rs 207.6 crore by writing new policies as against Rs 274.9 crore in FY’11 which is the decline of 24.5%.
Uncertainty over the rise in FDI limit in insurance sector is the biggest concern of foreign players in Indian insurance industry, characterized by regulatory issues, low margins, lack of policy road map and 18 months of unprecedented slide in premiums.
Aegon operates in India through a joint venture, Aegon Religare life insurance Company, which commenced its operations in 2007. In the JV Religare Enterprises holds 44% stake, Bennett, Coleman and Company holds 30% stake and rest 26% stake is held by Aegon. As of 31 December 2011 promoters of company has invested Rs 1,075 crore in it.
Aegon has started looking at all options including the exit route, in the light of its inability to invest further in the business, considering the results till now and decreasing chances of increasing Foreign Direct Investment (FDI) cap in insurance from the present 26% to 49%.This problem is faced by more than half a dozen companies and this development might indicate larger sector phenomenon.
However, as per Aegon it has no plans to exit from its insurance joint venture with Religare in India. It also said that it is committed to Indian insurance market.
Market analyst cite that, Aegon Religare Life , a pioneer in the online insurance space in India, is struggling to keep operating and agency network expenses down to match with the premium collected.
Aegon Religare is at the bottom five out of 23 life insurance companies in India. During FY’12 company collected Rs 207.6 crore by writing new policies as against Rs 274.9 crore in FY’11 which is the decline of 24.5%.
Uncertainty over the rise in FDI limit in insurance sector is the biggest concern of foreign players in Indian insurance industry, characterized by regulatory issues, low margins, lack of policy road map and 18 months of unprecedented slide in premiums.
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