IDBI, Fortis, Federal Bank launch life insurance co

Kochi, Jul 11 (UNI) The IDBI, Fortis Insurance International and the Kerala-based Federal Bank today announced the formation of a life insurance joint venture to tap the growing market for life insurance products in India.

The MoU for the new venture, to be called 'IDBI-Fortis Life Insurance in Association with Federal Bank,' was signed here today by IDBI CMD V P Shetty, Federal Bank Chairman M Venugopalan and Fortis Insurance International CEO Asia Damais Zeings.

Addressing a joint press conference after the signing of the MoU, Mr Shetty said the IDBI will hold 48 per cent stake in the company while Fortis and the Federal Bank will have 26 per cent each.

Fortis will increase its stake to 50 per cent once the Indian laws permitted foreign equity in the insurance sector to go up, he added.

The company aimed to launch a range of life insurance products by March, 2007, after obtaining the necessary regulatory and statutory approvals, he said.

Mr Shetty said the market for life insurance products was growing at more than 40 per cent a year.

''With 50 per cent of the country's population below 24 years, the sector provided an exciting opportunity,'' he added.

However, life insurance penetration in India was ''negligible'' compared to the potential and the field was ripe for the entry of new players.

At present, 12 per cent of the household savings went towards payment of life insurance premia, he said.

Mr Venugopalan said in just five years of the insurance sector being opened up, private companies had been able to garner 26 per cent market share.

He said that Federal Bank aimed to convert itself into a ''financial super market with an array of financial products for our customers to choose from.'' Mr Zeings said Fortis was happy to get into insurance operations in India and added the country was rapidly becoming one of the largest insurance markets in the world.

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