Reliance Moves Irda For General, Life Foray

This is the first instance of an Indian corporate planning to float both the insurance businesses. Among the financial institutions, ICICI Ltd is also planing to make a foray into both the segments. However, ICICI had applied only for life insurance business.

Reliance is the third applicant after IRDA opened the window for accepting applications for on August 16. ICICI Life Prudential Life Insurance and Dabur All-State Life Insurance were the first two.

The unique factor of Reliance's venture is that this is for the first time any Indian corporate is entering the sector without a foreign partner and that too both life and non-life segment, said an industry analyst.

The names of the two outfits are Reliance Life Insurance Ltd and Reliance General Insurance Ltd. Both the companies will start with authorised capital of Rs 200 crore. This is in excess of the IRDA regulation of a minimum Rs 100-crore authorised capital. The companies will use Reliance brand name for promoting their products and is planning to expand its business over all the major cities.

Even though the group has not tied-up with any foreign companies, it is likely to seek consultancy from foreign companies. "To get the best practice of the industry we are planning to take consultancy help from reputed global players," said a company source, "The group intends to adopt the best from different global giants which is not possible from a single tie-up," he said.

Reliance group has already finalised the core group for both the companies. Recruitment at the senior and middle management levels are also in process.

Reliance group has a total asset of more than Rs 50,000 crore. The net worth of the group is pegged at Rs 22,000 crore and the combined net profit was of Rs 2,500 crore. The turnover of the group as in March this year was over Rs 30,000 crore.