Edelweiss sets ball rolling on life insurance business

Edelweiss Tokio Life, the newest entrant in the Indian life insurance sector, has firmed up plans to rope in 6,000 agents and set up 44 branches over the next two years. It is also in the process of mopping up premiums worth Rs 100 crore by March 2013.

“We are looking to set up a multichannel distribution business, but to start with agency channel would be the main focus area. We have already set up 19 branches, which will go up to 22 by November and over the next two years we will be rolling out 44 branches,” Deepak Mittal, MD & CEO, Edelweiss Tokio Life Insurance Co, said.

To start with the life insurance company is looking to provide mortgage protection scheme and wealth solutions and would concentrate on the catchment areas of promoters company, Edelweiss Capital.

The company has a paid up capital of Rs 500 crore and got the nod from Insurance Regulatory Development Authority (Irda) in May.

Edelweiss Tokio Life is a joint venture between  between non-banking finance company (NBFC) Edelweiss Capital and Japanese  insurer Tokio Marine. Tokio Marine Holdings is the holding company for the Tokio Marine Group, and currently  holds 26 per cent stake in the venture, the maximum permissible limit for the insurance sector in India. Edelweiss Group holds the remaining 74 per cent stake in the company.

“Whenever the law would permit, Tokio Marine would increase its stake accordingly, at a pre-determined price. We have this as a binding clause in the shareholders' agreement,” Deepak Mittal, MD & CEO, Edelweiss Tokio Life Insurance Co told Business Standard.

Tokio Marine is expected increase its stake to 49 per cent in the company, whenever the government permits it. Importantly, the transaction would take place on the basis of a pre-determined price, agreed between the shareholders.

Edelweiss Group is the second Indian promoter which has such a clause that would allow for increase in foreign partner's stake in the insurance company, at a pre-agreed price.