Despite, short-term economic headwinds Japan’s Nippon Life is confident of India’s robust growth potential. It has said that that it will put to use all its resources to help its Indian partner Reliance Life to become the top life insurer in the country.
Nippon Life is the Asia’s largest private life insurer and seventh biggest globally with assets worth $650 billion. It has made two of the largest Foreign Direct Investment (FDI) in Indian financial services –Rs 3,062 crore in Reliance Life and about Rs 1,500 crore in Reliance Capital Asset Management Company. These investments have come at a time when concerns are being raised about the perceived notion of slowing pace of reforms in the country, especially in areas like FDI policies.
Nippon Life picked 26% stake in Reliance Life for Rs 3,062 crore which pegs the valuation of Reliance Life at around Rs 11,500 crore.
Factors that attracted Nippon Life to India include overall population, the demographic percentage of young people and steadily rising per capital GDP. All these factors make India a very attractive investment destination.
As per Nippon Life, it is a life insurance company and it invest from long term perspective hence; it does not get perturbed by short term fluctuations due to currency and short term spilling down of the economy. It also said that India is a growing market in long term.
Reliance Life is the largest private sector life insurance company in terms of number of policies with (over nine million) for consecutive two years as on 31 March 2012. For FY’12 Reliance Life was the seventh largest private sector life insurer in terms of total new business premium and sixth largest in terms of individual new premium. Company posted its first full-year profit in FY’12 with profit before tax of Rs 370 crore. Company has 5% market share among private players.
Posted on July 9, 2012 by Akanksha
vinay mohanty
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