: Survival of the fittest for general insurers in FY22 #IndiaNEWS #Business By Venkatachari JagannathanChennai, Dec 7 | With mergers and acquisitions (MA) already dotting the private players in the

Survival of the fittest for general insurers in FY22 #IndiaNEWS #Business
By Venkatachari JagannathanChennai, Dec 7 | With mergers and acquisitions (MA) already dotting the private players in the Indian general insurance sector this fiscal and Covid-19 pandemic hitting, it is going to be the survival of the fittest as more MA deals are expected to happen next fiscal, said senior industry officials.
World over, the initial reaction of governments and companies to the pandemic has been to cushion the effect of the fall to the extent possible. The world is still grappling with the daily realities and the impact on people, business and systems and processes, Roopam Asthana, CEO and the Whole Time Director, Liberty General Insurance Ltd told IANS.
But it just doesnt stop at cushioning the fall it is critical to accept the pain, measure the impact of the injury and be prepared for recovery. Simply put, the next year is going to be about the survival of the fittest, Asthana added.
Expecting few more promoter exits in the coming months Asthana said it is time for the foreign direct investment in the insurance sector to be increased to 74 per cent so as to attract long term foreign capital that is very essential for expanding the reach of insurance in every corner of the country.
Terming mergers and acquisitions as a legitimate inorganic growth strategy, Sharad Mathur, Managing Director CEO, Universal Sompo General Insurance Company Ltd told IANS: Stable and established players would likely be in the look-out of opportunities.
He said, world over that post opening up of the insurance sector, there is mush-rooming proliferation of players. The next phase is characterised by merger and acquisition, by consolidation.
The process usually starts in 6-8 years after opening up. It has not happened in India in the sense that it is already two decades of liberalisation and MAs in a big way have not taken place. It only means that the trends have been slow in cooking and are building up. Hence, the pace of MAs should pick up, Mathur remarked.
In the recent times, the Indian general insurance sector saw Paytm acquiring Raheja QBE, HDFC Ergo acquiring Apollo Munich, Sachin Bansal buying DHFL General Insurance and the merger of ICICI Lombard and Bharti Axa General.
Acquisitions are becoming a strategic business route. Increased fundraising activity in the sector is an indicator of growth and scale of business, Shanai Ghosh, Executive Director CEO, Edelweiss General Insurance told IANS.
Be that as it may, the officials expect FY22 to be growth oriented for the sector with pre-corona momentum in the economy resuming.
Post announcement of official India Q1 FY 21 GDP (gross domestic product) growth rate, the overall FY 21 forecast downgraded by all agencies.

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