Warren Buffett to Launch Indian Insurance Co.

Warren Buffett Invests in Indian Motor Insurance

According to a report in the Economic Times, Warren Buffett is planning to set up a wholly-owned subsidiary in India to acquire a corporate agency licence to sell motor insurance via locally based company Bajaj Allianz.

The aim is for the new operation to sell motor insurance online, with an an investment of somewhere in the region of $10.9m, pretty small by Berkshire Hathaway standards, to establish a support structure, including a call centre.

This unusual strategy is said to have been thought up by Anit Jain, who visits India on a regular basis as part of Berkshire Hathaway’s reinsurance business in the Asian sub-continent. Berkshire Hathway operates as a direct insurer in the US via its Geico operation. In India, direct investment in insurance, reinsurance, or insurance broking by foreign companies, is restricted to a 26% stake.

A corporate agency on the other hand can be wholly foreign-owned. The downside is that each individual in such an agency will need to undergo training, and the agency can only promote the products of a single company. In addition, it does not underwrite its own business, but instead makes profits on commission payments.

With a population of around 1 billion India is a vast market and as car ownership increases it seems likely that Indians will be buying more motor insurance in future. For further information on India check out Visit India

Elsewhere Warren Buffett and Bill Gates have launched a campaign to get other billionaires to give away most of their money. They want America’s 400 or so billionaires to sign a Giving Pledge promising to donate at least half of their fortunes to charity. If thy do then this would triple the USA’s total amount of charitable giving. The Giving Pledge is not legally binding but Buffett has decided to set an example by promising to give away 99% of his money. Charities are delighted of course, but so far there has been no word from the children might expect to inherit the billions.

See also Warren Buffett's latest venture to teach children how to manage their money - Secret Millionaire's Club

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