The Industrial Development Bank of India (IDBI) has given up its plans to foray into insurance business as of now, and is planning to enter the pension segment instead. ‘‘We have put on hold the life insurance foray. We are planning to enter the pension segment first, in both group and individual segments,’’ an IDBI official said. ‘‘We are already in a dialogue with Principal Financial Group (PFG) of the US, which is our joint venture partner in IDBI Mutual Fund. Principal is one of the largest players in the pension segment in the US. We are happy with our partnership with them,’’ sources said. ‘‘A large number of private financial companies have mushroomed in the life insurance sector and they have started feeling the heat. The main reason for not entering the segment is that it is a long-term kind of an industry in which the break-even period also is quite high.’’ Another reason is that the financial institution (FI), which is going ahead with its plan to convert itself into a universal bank, which was also mentioned in the recent budget by Finance Minister Yashwant Sinha, does not want to take up too many issues at a time, complicating the whole gamut of affairs, the sources said. For the last one year, IDBI had been expressing its interest to enter the insurance segment. The proposed pension reforms in the country has resulted in a change of plans for IDBI, especially since PFG is one of the largest pension players in the US. IDBI is preparing the blueprint for its entry into the pension sector, with the help of its strategic advisor Boston Consulting Group (BCG). However, the report for the pension reform plan has not yet been finalised by the government.
