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Buffett open to making direct entry into insurance

Press Trust of India  |  New Delhi 

Warren Buffett-led Berkshire Hathaway is looking at direct entry into the growing insurance sector and is keenly watching the developments regarding further opening of the sector to foreign investment.

The US conglomerate Berkshire Hathaway had recently forayed into the Indian non-life insurance sector as a corporate agent of Bajaj Allianz General.

When asked about company's plan to directly enter the Indian insurance market, Berkshire Hathaway head re-insurance Ajit Jain told PTI, "(everything) depends on regulation."

India-origin Jain, long rumoured to succeed Buffet, looks after the conglomerate's multi-billion dollar re-insurance business.

Billionaire investor Buffett, Chairman and CEO of Berkshire Hathaway, earlier this week said he was looking at investments in large economies like India.

On his maiden visit to India, Buffett had said that an foreign investment cap of 26% in insurance sector here was a deterrent.

India currently allows only 26% foreign investment in insurance business, but a proposal is underway to hike it to 49%.

A bill pertaining to raising FDI ceiling in the sector is pending before Parliament. India allowed foreign players to have insurance joint venture in both life and non-life segments with a maximum stake of up to 26% in 2000.

As part of its India entry, the American conglomerate has incorporated a company 'Berkshire India' to sell and distribute general insurance products in India.

Berkshire Hathaway is a sprawling conglomerate that has interests in various businesses, including property, casualty insurance and reinsurance, finance, manufacturing, and retailing.

The 80-year-old Buffett, who is in India as part of his philanthropic initiatives, is also expected to look at possible investment opportunities in the country.

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First Published: Fri, March 25 2011. 15:29 IST