Berkshire Hathaway is all set to venture into Indian insurance business by establishing a wholly-owned subsidiary that will acquire a corporate agency license from the Indian insurance sector regulator Insurance Regulatory and Development Authority (IRDA), according to The Economic Times.
Berkshire Hathaway will use its license to sell auto insurance policies from Bajaj Allianz General Insurance. Berkshire Hathaway’s subsidiary is expected to make investments of approximately $11m to set up a support structure, including a call center, the newspaper reported.
Berkshire Hathaway has chosen the corporate agency route to enter into India because of the low foreign direct investment limits in all other insurance business, according to the source.
According to current Indian regulations, foreign investors are not allowed to hold more than 26% equity stake in the business.