Insurance industry will continue to see M&A deals, new entrants
   Date :19-Sep-2022

Insurance industry 
Business Bureau
MERGER and acquisitions will continue to be a part and parcel of the insurance sector, which is a highly capital intensive sector and can accommodate new entrants with specialised skill sets having long-term vision.
The past developments in this sector and recent decision of the Mumbai National Company Law Tribunal (NCLT) allowing merger of Exide Life Insurance with HDFC Life is an indication that entities without requisite expertise may quit the sector. In order to equip itself with the complexities of merger and acquisitions, the Insurance Regulatory and Development Authority of India (IRDAI) has started looking for consultants who can undertake valuation of state-owned and private sector insurers, and train its officials about valuation methodology and processes.
Market players and analysts are of the view that the sector has significant potential for development and there will be new entrants in the insurance industry and also Merger and acquisition (M&A) deals.
“The sector, like others, has witnessed some merger and acquisitions in the past and will continue to witness them and newer opportunities will emerge in the future. Players with sound underwriting practices, strong financials and right management practices will continue to grow in the long-run,” said Anand Pejawar, Deputy Managing Director, SBI General Insurance.
Pejawar further said India’s insurance landscape is vast and there is immense scope and enough volume for players to co-exist. Given the scope for growth in the sector, both large and niche players can continue to operate in the market.
Currently there are 24 life insurance companies and 31 non-life or general insurance firms, including specialised players like the Agriculture Insurance Company of India Ltd and ECGC Limited.