As Nippon Life Insurance Company signed a definitive agreement to acquire a 26% stake in Reliance Life Insurance, experts read this as a benchmark for the industry as a whole. Ashvin Parekh of Ernst & Young and P Nandagopal managing director and CEO of IndiaFirst Life Insurance, in an exclusive interview with CNBC-TV18’s Udayan Mukherjee and Mitali Mukherjee share their views on the deal and its implication for the life insurance sector.
Sharing his views on the sector as whole, determining from this deal in particular, Nandagopal emphasizes that, “there is need for capital in the life insurance industry. And going to the market may not be the immediate available option for many other companies. Hence the foreign direct investment (FDI) route is a possibility.” Parekh also points out that “there is enough capital that is available with foreign investors. It can be introduced into this market and the foreign investors are prepared to pay a price for it.”
On the ramifications of the deal, Parekh says “Strategic inputs must have gone into determining the valuation. Nippon wouldn’t have got a better deal and a better partner and Reliance has got one of the world's largest life insurance companies.” He also believes, “Reliance Life is ready for an IPO.” Nandagopal agrees that “the deal is in the best interest of both the partners.”
Sharing his views on the sector as whole, determining from this deal in particular, Nandagopal emphasizes that, “there is need for capital in the life insurance industry. And going to the market may not be the immediate available option for many other companies. Hence the foreign direct investment (FDI) route is a possibility.” Parekh also points out that “there is enough capital that is available with foreign investors. It can be introduced into this market and the foreign investors are prepared to pay a price for it.”
On the ramifications of the deal, Parekh says “Strategic inputs must have gone into determining the valuation. Nippon wouldn’t have got a better deal and a better partner and Reliance has got one of the world's largest life insurance companies.” He also believes, “Reliance Life is ready for an IPO.” Nandagopal agrees that “the deal is in the best interest of both the partners.”
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