The company plans to utilise the capital to maintain solvency margin that has been under strain owing to the new business growth
The promoters of Tata AIG Life Insurance are planning to pump $6-7 billion capital into the joint venture during the current financial year – reported Business Standard. The capital injection is expected to be in proportion to the shareholding. At present, Tata group holds 74% stake and American Insurance Group (AIG) holds 26% in the joint venture.
Reportedly, the company has recruited about 2,500 direct employees during last year and increased its branches to 400 over the last two years. Against this backdrop, the company plans to utilise the capital to maintain solvency margin that has been under strain owing to the new business growth.
Vivek Sood, chief financial officer, Tata AIG Life Insurance, said: “Both our partners are committed to the life insurance business. We will try to bring down our capital requirement for 2009-10, but the company will need around Rs 600-700 crore,” reported the newspaper.
“We are taking certain initiatives such as making the headcounts more productive, changing our business structure to bring down the expense ratio to 22 per cent. Our focus, going forward, will be to leverage on the existing workforce, as we have recruited a substantial number last year,” he added.