To equip itself to cope with the complexities of merger and acquisitions, the IRDAI is looking for consultants who can undertake the valuation of state-owned and private-sector insurers, and practice its officers about valuation methodology and processes, as mergers and acquisitions will proceed within the insurance sector.
Pavanjit Singh Dhingra, joint managing director of Prudent Insurance Brokers, instructed Press Trust of India, “There will be new entrants and there will be M&As—it is a natural process.”
Mr Anand Pejawar, deputy managing director of SBI General Insurance, mentioned that India’s insurance panorama is huge and there may be immense scope and sufficient quantity for gamers to co-exist. Given the scope for development within the sector, each massive and area of interest gamers can proceed to function out there.
Currently, there are 24 life insurance corporations and 31 non-life or normal insurance corporations, together with state-owned normal insurers and specialised gamers just like the Agriculture Insurance Company of India and ECGC.
Another motive for on the lookout for valuation experts can be the IRDAI’s plans to divest its stakes in state-owned insurers.
Alternatives to M&As
Other insurance executives are of the view that whereas economies of scale are vital, they will also be achieved by means of business development fairly than simply by way of an M&A.
Insurance corporations are additionally collaborating with InsurTech corporations to offer progressive options in areas starting from distribution, service, to claims.
Ms Shailaja Lall, a companion on the legislation agency Shardul Amarchand Managladas & Co, mentioned the insurance sector is extremely capital-intensive and there may be going to be continued funding exercise within the insurance sector, particularly with respect to InsurTech corporations, led by personal fairness funds.
