Maruti Suzuki India Ltd. Is planning to re-enter the insurance business space once again in 2012, after it was barred from selling vehicle insurance policy about two years ago. Maruti was selling motor insurance under the brand name “Maruti insurance” since 2002 and was stopped by the Insurance Regulatory and Development Authority (India) in the year 2010 for violation of Foreign Investment Laws. Maruti Suzuki Insurance had sold at least 2.5 million (2 Lakh) polices before it was forced to shut down, the ban came into effect after local insurers claimed that Maruti Suzuki was inflating service bills and pushing them into financial crisis through its claims, the ‘mint’ reported, in July 2010.
Now, the Maruti Insurance would be known as “Maruti Insurance Broking Pvt. Ltd” headed by Mayank Pareek, Executive officer ( marketing & sales ).
A company spokesperson said
“Around 18 months back, in November 2010, we formed a joint venture company, Maruti Insurance Broking Pvt. Ltd, to take care of this growing insurance business.”
image – Damaged car for illustration only
The IRDA awarded this company with an operating license in February 2012. Since then it has collaborated with all the insurers to adhere all the mandates laid down by the government. Since a foreign company is not allowed to hold more than 26% stake in the insurance business , Maruti had to go with a joint venture, however details about this was not disclosed by the company.
Maruti Suzuki India is the largest passenger car maker in India and has a huge sales and service network in India. Auto Insurance sector in India is also a big industry as the average price of the cars purchased and hence the premiums are higher than ever in the history. With its wide reach and its own car dealerships, Maruti can bring huge business to its insurance company. This will mean huge revenues in terms of insurance premiums along with advantage of its pre-existing reach and infrastructure which it already owns across the nation.
Maruti has recently launched its MPV which it called Maruti Ertiga LUV in India which seem to be a very promising compact MPV with small overall form factor and huge inside space with prices starting from just Rs. 5.89 Lakhs. It will be interesting to see how long these “introductory”prices remain as such. Check our more Maruti Suzuki India News here.
via – Livemint