Life insurance companies are likely to see erosion of margins per product under the new regulatory regime, which started from January as now they have to pass on certain minimum benefits to the customers, a senior executive of Max Life Insurance said on Thursday. “New products and new regulatory regime will squeeze the industry’s margins per product. Certainly insurance companies’ margins will erode as under the new norms margins that a company can keep has come down,” said Max Life Insurance senior director & chief distribution officer Ashish Vohra. The life insurance industry’s net profit grew 16.3 % to R6,948 crore during the last fiscal year from R5,975 crore in the previous year. According to the annual report of the Irda for 2012-13, of the 24 life insurance companies in operation, 17 reported profits.
‘RBI could hold rates on easing inflation’
The RBI will likely hold interest rates steady when it meets next week, thanks to an easing inflation and as it waits for more data, according to a Reuters poll of economists, who also predict better economic growth in the next fiscal year. The median consensus from the poll showed 45 of 50 economists expect the repo rate to be kept unchanged at the meeting and held steady until September before being cut by 25 basis points in the last quarter. “We expect the RBI to maintain its current policy while acknowledging upside risks to inflation next week,” said Arun Singh, economist at Dun & Bradstreet.
Bajaj Fin to raise Rs 2,500 cr in deposits
Non-banking lender Bajaj Finance on Thursday said it is targeting to raise R2,500 crore through a fixed deposit scheme in the next three years to strengthen its nascent wealth management business. Under the scheme, the Pune-headquartered firm will offer products in maturities ranging from one year to five years and offer an interest rate of up to 10%, the company said.
Senior citizens and Bajaj Finance customers will earn an additional interest of 0.25%. “The fixed deposit programme is a step forward in building a comprehensive wealth management business and is aligned to our objective of