Insurance appears to be the next big thing in the business space in India as the Indian insurance regulator IRDA (Insurance Regulatory Development Authority) finds itself busy issuing licences. The latest to join the fray is former chairperson of State Bank of India Arundhati Bhattacharya, with an insurance startup Welmo Fintech Pvt Ltd. Her partner in this venture is Sunil Mehta, an old insurance hand himself. Mehta used to be the country head and chief executive of AIG, the US insurer. Deepak Ishwarbhai Amin, a former director of SBI is also reportedly part of the team though the details are yet to emerge of his association.
As of now, what has come out in the public domain is that the company Welmo Fintech has been registered by the duo on September 3 and they have applied to the IRDA for R1 approval. In insurance parlance, R1 approval is the first stage approval given by the IRDA to float an insurance firm. There are a couple of more stages, R2 and R3 approvals to be obtained by the company before it can start issuing policies.
The new company has shown only Rs 1 lakh as its share capital. This will have to be raised to at least Rs 100 crore before IRDA will consider their application for R2. The promoters may approach venture capitalists to place their trust in them to invest in the startup and raise the capital required.
None of the persons named have gone public with this announcement. The information has been gathered from reliable sources and from statutory filings with the Ministry of Corporate Affairs.
Arundhati Bhattacharya retired as the chairperson of SBI in 2017. She has been serving as a director on the boards of several Indian companies including Reliance Industries Ltd.
As mentioned at the start, the insurance scene is hotting up in the country. While life insurance and general insurance categories have more than two dozen players each, there are around six health insurance players as well. The prospects however appear to be quite bright with the insurance penetration figures reading abysmally low. It is reported that less than 1% of the population have general insurance while the life insurance coverage is 2.76%. Even taken from the perspective of the insurance premiums collected by the insurers as a percentage of the country’s GDP, it is just a third of the global average of 2.8%. No wonder, you have seen companies like Go Digit General Insurance Ltd, Acko General Insurance Ltd, DHFL General Insurance Ltd and Edelweiss General Insurance Co. Ltd had obtained their licences for issuing general insurance policies in 2017. There are more companies in various stages of launching their activities in this space. In most cases, the promoters have been former insurance executives.
One of the latest ones to get into insurance was Indiabulls General Insurance Ltd, a subsidiary of Indiabulls Integrated Services Ltd.