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Chari Finance Ltd is one of the leading non-banking financial companies in
Southern India. With liberalization of the insurance sector, there were
opportunities galore and like most organizations, Chari Finance Ltd, also
wanted to enter the field of non-life insurance.
The top management of Chari Finance Ltd planned to focus on the motor
insurance business. They decided to hold a meeting to study the feasibility
of the business idea and to know the ground realities existing in the
market. In the meeting, the chairman of the company, Meenai Subramanyam (Subramanyam),
announced, "As per my knowledge, the environment in the motor insurance
sector is not conducive."
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"The sector has been recently opened up to private players. How can you
conclude that the environment is not conducive even before entering it?"
asked Kallupatti Kartekeyan (Kartekeyan), Vice-President (Sales).
Subramanyam replied, "At present, all the private sector insurance
companies are pulling out of the motor insurance sector. In a situation
like this, how can we think of entering such a market?" "But players
like Tata-AIG, ICICI-Lombard and Bajaj Allianz are still there in the
market. If the business environment is not congenial, why are these
players continuing in the business?" asked Kartekeyan... |
Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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