Indian Banks Plan To Foray Into Insurance Sector

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Many Indian banks are planning to enter the insurance sector due to the huge growth that is estimated to take place in this sector. Indian banks Plan to Foray into the insurance sector by setting up their own insurance companies. The Indian insurance sector collected a premium of about ` 75,000 crores in the segments of non- life and life insurance, during the first nine months of 2007- 2008. Further, the business of insurance in the country is expected to increase due to the growth in the categories of semi- urban and rural insurance and is expected to be worth about US$ 60 billion by 2010.

   
According to the Insurance Regulatory and Development Authority (IRDA), the private insurers had collected premium income from new business of about ` 18,980 crores, in 2007. The major Indian Banks that are planning to enter the Insurance sector of the country are Union Bank, Federal Bank, Allahabad Bank, Bank of India, Karnataka Bank, Indian Overseas Bank and Bank of Maharashtra. Further, there are a number of banks that are planning to set up their own companies for insurance such as Bank of Baroda, Punjab National Bank, and Dena Bank.

Union Bank, is one of the banks that is planning to enter the insurance sector of the country and it's head office is located at Mumbai. Allahabad Bank was set up on 24th April, 1865 and it has been providing a wide range of services to its customers. It is also planning to foray into insurance sector of India. Bank of India, is another Indian bank that is planning to enter the insurance sector of the country and it was set up on September 7th, 1906. Bank of Maharashtra started its business on 8th February, 1936 and it has more than 1200 branches spread all over the country. It is also planning to foray into the insurance sector of India. Indian Overseas Bank was set up on 10th February, 1937 with the objectives of specializing in overseas banking and in the business of foreign exchange. It is another Indian bank that is planning to enter the insurance sector of the country.

The Indian banks are planning to enter the insurance sector on their own, without partnering with insurance companies due to several reasons. One important reason is that they would get better dividends than the commission they would get by entering into partnerships with other insurance majors. Moreover this would help them to diversify from the regular banking activity that they are involved in. The insurance companies have been affected with the planning of Indian banks to foray into the insurance sector of the country. This is due to the fact that the insurance companies are now unable to find banks with whom they can enter into partnerships for the distribution of their products

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