The insurance companies are happy with the measures announced by the FM in budget 2013. The companies feel that measures will motivate them to open more branches in tier II and III locations which will result in deeper penetration.
Amitabh Chaudhry, MD and CEO, HDFC Life, “This budget reflects a tight rope walk by the Finance Minister given that he has to bring back investor confidence, spur investment and growth as this might be the last full budget prior to general elections. The budget is a responsible and pragmatic one with announcement of several initiatives that should spur growth and help us increase penetration in rural areas.”
Dr. P. Nandagopal, MD & CEO, IndiaFirst Life Insurance feels that it is a positive budget from the insurance and BFSI perspective. He said,“ On the big picture, the investments in education, skill development, infrastructure and rural development will have positive impact on the life insurance demand. On the specifics, while there're no additional tax concessions as was expected, the big announcement is the proposed open architecture for bancassurance through the broking route. We need to check the details and also take steps to see that the broking model does not result in excess distribution costs for the insurance companies which are already reeling under the pressure of thinning margins.”
According to budget announcement, the Finance Minister announced that all towns with a population of 10,000 or more will have at least one branch office of state-owned LIC and a public sector non-life company by the end of FY14.