Life insurers, which saw negative growth last year, have drawn up major capital infusion plans. More than Rs 3,000 crore of capital is waiting to be infused to foster growth of the under-penetrated sector.

However, the capital being injected in 2009-10 will be far lower than that in 2008-09.

The funds to be infused by the insurers is the capital requirement for the whole financial year and will remain the same irrespective of the Insurance Bill that is pending in Parliament.

Rajesh Sud, chief executive officer and managing director, Max New York Life (MNYL), said, “The passage of the bill will define where more capital comes in from because the capital requirement remains the same.” According to Sud, MNYL is eyeing a capital base (paid-up capital) of Rs 3,600 crore by 2012, of which around Rs 300-400 crore will be infused this year.

Paresh Parasnis, executive director and principal officer, HDFC Standard Life, which has a paid up capital base of Rs 1,796 crore, said, “We will be injecting capital keeping in line with the private sector growth pegged at 20 percent year-on-year and to meet the strain arising from the new business growth that we will be achieving this financial year.” The insurer plans to infuse capital of Rs 350 crore in 2000-10, lower than Rs 525 crore infusion in financial year 2008-09.

Insurers, until now, have been infusing capital to fund their branch and network growth because they were in an expansion mode until now.

But with the insurers shelving their plans for any further expansion, acquiring new business and optimising business per branch is the main objective. Only the companies, which have started their operations a year or two back, are still talking about robust infrastructure growth.

Star Union Dai-ichi Life, IDBI Fortis Life, Future Generali Life and Bharti AXA Life are the New Age life insurance companies. M Balachandran, chairman and managing director, Star Union Dai-ichi, said the company would set up 20 regional offices, for which Star Union Dai-ichi will be infusing Rs 200 crore, bringing their total paid-up capital to Rs 450 crore by the end of March 2010.

Bajaj Allianz Life, which has already a strong branch network and claims to have turned profitable, did not infuse any capital in financial year 2008-09 and the insurer is not looking at infusing any in the present financial year too. Pankaj Desai, executive director of Kotak Life Insurance, which managed to break even last year, will not be infusing any capital this year. Kotak Life has a total paid up capital of Rs 510 crore and infused Rs 30 crore last financial year.