Banned by the Insurance Regulatory and Development Authority (Irda) from selling motor insurance to its customers, Maruti Suzuki India Ltd, the nation’s largest passenger car maker, is looking to float a general insurance firm with a local partner. It may also be a three-way joint venture. The company had been selling motor insurance under its umbrella brand, Maruti Insurance, since 2002.
In fiscal 2010 alone, it sold at least 2.5 million policies, but won’t be selling any more as the regulator has cancelled its agency licence. The move came after insurance companies alleged that Maruti service stations were inflating bills and pushing them into losses through hefty claims.
Foreign companies can’t hold more than 26% of any Indian insurance venture. With Japanese parent Suzuki Motor Corp. holding a majority stake in Maruti, it will not be able to hold a 74% stake because of its overseas partner’s indirect holding. This means it will be a three-way joint venture.
Globally, there have been instances where the car makers themselves have entered into the motor insurance business to cater to their customers. For instance, Ford Motor Co. and Mitsubishi Motors Corp. have their own motor insurance business. Till recently, Maruti Suzuki was acting as an agent for at least six major general insurance firms, including National Insurance Co. Ltd, New India Assurance Co. Ltd, Iffco-Tokio General Insurance Co. Ltd and Bajaj Allianz General Insurance Co. Ltd.
There are 23 non-life insurers in India and 17 of them sell motor insurance. The non-life insurance industry has been grappling with huge losses over the years, primarily because of inflated bills both in the motor and health insurance businesses. As of 31 March, the company had a sales network of 802 centres in 555 towns and cities across India. It provides service support to customers at 2,740 workshops in at least 1,335 towns and cities.
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| Company Name | CMP |
|---|---|
| Maruti Suzuki | 10904.75 |
| Mahindra & Mahindra | 2906.40 |
| Hyundai Motor India | 1764.75 |
| Mercury Metals | 88.11 |
| Hindustan Motors | 25.10 |
| View more.. | |
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