Tokio Marine aims to dominate in India

Tokio Marine aims to dominate in India

NEW DELHI (Reuters): Japan's largest non-life insurer, Tokio Marine & Fire Insurance Co, is committed to India for the long term, and will strive to become the leading general insurer in the country, a company official said.

"We want to be number one in India's non-life insurance industry. This is the first time that Tokio Marine has set such a goal in a foreign country," Takuya Okui, Tokio Marine representative in New Delhi, said in an interview.

Tokio Marine has a joint venture with the Indian Farmers Fertilizers Cooperative Ltd (IFFCO), India's largest producer of fertilizer.

The joint venture, IFFCO-Tokio General Insurance Co Ltd, recently received an insurance license from the government, which followed the passage of a law by India's parliament which dismantled decades of state control of the insurance industry.

"India, like many countries including Japan, had long regulated the insurance industry because the insurance business can be a drain on foreign reserves," Okui said.

Okui said payments of reinsurance premiums by insurers to foreign reinsurance firms for risk-hedging, have traditionally been considered a source of current account deficits because such payments are usually made in foreign currencies.

But India's foreign reserves have increased in recent years, and stood at US$37.077 billion as of November 17, a level which is sufficient to cover more than nine months of imports.

Okui said one of the allures of India for insurers was the rapid pace of growth of the insurance market. The size of the non-life insurance market grew to around 100 billion rupees in 1999 from around 74 billion three years earlier.

"The insurance market in India has, in recent years, grown by two to three times the speed of growth in its gross domestic product," Okui said.

To take advantage of the speed of growth, Okui said Tokio Marine, which holds the maximum 26 percent equity stake allowed to foreign firms under the new Insurance Regulatory Development Authority (IRDA) law, would tailor its business for retail customers and small businesses in India.

"We want to grow out of relying on Japanese firms for business overseas," Okui said.