Skandia, the leading provider of life insurance with more than 10 per cent market share, runs a successful bank and sees itself increasingly as provider of financial services. In Germany, the aborted merger between Deutsche and Dresdner Bank, the brainchild of Allianz, the Munich based insurer, was driven by the insurer s desire to access the branch network of the two banks. It is hard to say. The IRDA chairman is already on record that no insurance company is likely to make profits for the first eight years. That s not surprising.
Insurance is a tricky business.
And, according to Standard and Poor s, is becoming more so. Many other companies have been downgraded, among them some of the better known names in the insurance business while not a single one has been upgraded. Worse, since premium payments are made ahead of claims, there is always a lag before insurance companies reflect current conditions. Kyoei and Chiyoda, another insurance company that came to grief just a few weeks earlier, had solvency ratios of over 200 per cent. But that did not prevent them from going under.