Berkshire Hathaway Inc., a U.S. based insurance company run by Warren Buffett, has announced that they will be entering the insurance market in India. The insurer will make its entrance into the Indian sector as a corporate agent of Bajaj Allianz General Insurance.
Berkshire Hathaway will provide general insurance products via online distribution. They will focus their efforts mostly on auto insurance and branch out from there.
The Indian insurance market is experience rapid evolution and Berkshire Hathaway is committed to providing the products that are needed most. According to a statement released Wednesday, “if the market proves receptive, the company will seek to expand its products to include health, life and travel insurance.” There are plans to include other lines of coverage as well, should the move prove successful.
A number of insurers have been eager to make their way into India’s insurance market, but efforts have been held back by the nations strict ownership limits.
The announcement has already had an impact on the stocks of Bajaj Finserv, an Indian insurance and financial firm that is partnering with Berkshire Hathaway to create the Bajaj Allianz General Insurance group. Shares jump 14% since the announcement was made Wednesday.
“We’ve been tracking the Indian insurance turf for years and are thrilled about the emerging retail insurance opportunity,” noted Kara Raiguel, Berkshire India director.
The new insurance group has more than 40 corporate agents that will account for 40% of its premium income.