Edelweiss strikes deal with Tokio Marine for life insurance

Edelweiss Capital and Japanese insurance major Tokio Marine Holdings (TMH) have signed an agreement to form a joint venture and launch life insurance operations.

The new venture, which will begin with an initial capital base of Rs 550 crore, may see the capital infusion only in case the government hikes the FDI cap in insurance sector to 49% from existing 26%. "We hope that the sum of Rs 550 crore will take care of our needs for first few years," said Rashesh Shah, chairman, Edelweiss Capital.

To begin with, the company is looking at having a product mix comprising Ulip, endowment, variable annuity with retirement planning and capital guaranteed products altogether.

"Also, it will start its venture with a project team comprising 40-50 people for the first year of our operation after getting an approval from Insurance Regulatory & Development Authority (Irda). The company has plans to enter some of the more segments in the Indian market in future. We are looking at both routes, organic as well as inorganic, to expand our business in Indian market," said Hiroshi Endo, managing director and member of the management committee, TMH.

TMH enjoys the largest market share in non-life insurance in Japan, whereas it stands 10th among the 44 life insurance players in Japan.

Talking about the future plan of his company in India Takashi Yoshikawa, CEO, Tokio Marine Asia, said, "We will be looking at innovations which may be visible through different kinds of product development and business process technology."

Moreover, the company will try to go aggressively in tier-II and III cities of the country where the insurance penetration was still low. Some of the other countries the Tokio Marine Holdings is already present include China, Malaysia, Thailand and Japan.

Apart from life insurance, TMH has presence in general insurance and asset management sectors among other areas of financial services.