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UCO, UBI, Corporation Bank Plan To Foray Into Non-Life Business

Travelers of US, Liberty Mutual of Boston, Berkshire Hathaway, Royal Bank of Scotland and Credit Agricole are among the bidders to be invited

UCO Bank, Union Bank of India and Corporation Bank have decided to establish non-life insurance companies. In response to this, the industry consultants believe that it is a trend in which more state-controlled as well as private banks are expected to diversify into this area – reported Hindustan Times.

The sources close to the development claims that Travelers of US, Liberty Mutual of Boston, Berkshire Hathaway, Royal Bank of Scotland and Credit Agricole are among the bidders to be invited. Banks are aided by prospects of high valuation while the capital required is relatively low.

SK Goel, chairman and managing director of UCO Bank said: “We will hold a 26% stake in a consortium of five players. Six foreign players and four to five domestic banks have evinced an interest in tying up with us. By month end we will finalise the domestic partners and next month call for bidding from the foreign players.”

According to an industry analyst, the order of capital is not as substantial as required in a life insurance business. He further stated that ICICI Lombard needed only INR300 crore over an eight-year period, while ICICI Prudential Life required INR5,000 crore.