Insurance sector in Pakistan is likely to have another feather in its cap. Rosewood Insurance Group--a Switzerland based insurance venture--is intending to acquire 74.9 percent stake in TPL Direct Insurance.
Recall that a few months ago there was some tittle-tattle in the market regarding a foreign investor proposing to invest in the insurance sector in Pakistan, though further details on this matter were left behind the scenes by the regulator.
To give a background about Rosewood, the company is an insurance based venture capitalist having profound insurance expertise and long-term partnership approach to direct insurance companies to become market leaders by putting such companies on the right track.
In a published interview with BR Research, Asif Arif, Insurance Commissioner at SECP stated: "These venture capitalists target pick companies with a market share of three to five percent and by providing the right products and support systems; it aims to increase the market share to 15-20 percent over a span of five years." If thats the case then TPL Insurers is surely hitting it big if the deal comes off.
It is worth mentioning that Rosewood has its eyes on two other insurance companies from Pakistan besides TPL Insurance, seven from Africa and other nine companies from Asia, according to Arif. He expressed gratitude in conveying that the insurance sector is seen attracting foreign inflows after a long pause. Gaining the right technical expertise and hands-on experiences of these venture capitalists, insurance sector is bound to gain a strong suit, thus enabling the industry to step into the advancement phase.
The anticipated influx of foreign investment is a clear manifestation of improving insurance industry's prospects and strengthening foreign investors sentiments. Pakistan's insurance sector which was labelled as a lagged sector, in terms of development and growth, is now witnessing signs of revival and the efforts put forward by the regulator warrant some brownie points.
In this context, developments such as the allowance of window takaful operations and the introduction of micro insurance regulations are worth mentioning. One can say that the ground work to set the industry in motion has already been done and the fruits will start cropping up over the next five to ten years.
TPL Insurer is a relatively small insurer with a paid-up capital of Rs1.15 billion and a market share of two percent on the basis of net premiums, according to the latest data published by Insurance Association of Pakistan (IAP). Looking at the financials, TPL Insurance has managed to post steep rise in its premiums year after year, which in turn have led to improvement in firms margins. Considering the progress in financials, TPL Insurers seems to be a good pick for Rosewood!
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