ICICI Prudential says consolidation is way forward for industry

Mumbai (PTI): With capital becoming scarce due to the global economic meltdown, ICICI Prudential on Sunday said that consolidation and raising FDI limit to 49 per cent were the way forward to fuel the life insurance business.
"Now access to capital is shrinking and this is likely to continue for the next six months to one year...consolidation makes sense in this scenario," ICICI Prudential Life Insurance's Managing Director Shikha Sharma told PTI.

In every business, there will normally be four to five major players and 10-12 players altogether. There is, therefore, an immense potential for consolidation within the industry here, Sharma said.

Margins in India were thinner and customers more value-conscious and hence, companies needed scale to remain competitive.

"In this scenario, consolidation makes sense," she said. While ICICI Prudential Life was ready for acquisitions, there were no immediate proposals, she said, adding that the company was, however, always ready to consider any proposal that provided some synergy benefit to it.
On the need for hiking FDI limit to 49 per cent from the present 26 per cent, Sharma said that this would help the industry to access global capital.