Nearly a year after promising to do so, legendary investor Warren Buffet has entered the Indian market through his flagship Berkshire Hathaway.
The firm, which was bought by legendary investor Warren Buffet in early 60s, is the primary holding company of the Warren Buffet and gets most of its revenues from its insurance operations.
Built up by Buffet, the $100 billion company today has subsidiaries in utilities and energy, freight rail transportation, finance, manufacturing, services and retailing, besides its mainstay of insurance and has nearly 2.5 lakh employees.
In India, Berkshire Hathaway will sell insurance, initially from Bajaj Allianz, the company said in its entry statement. It will enter other sectors like health insurance, life and travel insurance and other personal lines, if the business model ‘clicks’.
Warren Buffet, who has almost zero investment in one of the world’s fastest growing economies, had announced his intention to enter India during the annual general meeting of Berkshire Hathaway in Omaha in May last year. He had promised to visit India in March 2011, though he also expressed concern over the investment climate in the South Asian nation.
Through the new venture, Berkshire India will sell insurance directly to the consumer by utilizing the internet portal (berkshireinsurance.com) and tele-marketing. Initially, the focus will be on Motor Insurance, but the Company will continuously update its business model to meet the needs of the fast evolving Indian insurance sector, it said.
Berkshire Hathaway will try to replicate its success in the online and direct distribution model, pioneered in the US. It is already one of Bajaj Allianz’s agents for its corporate insurance business.
“Buying financial products directly over the internet is a relatively new and growing opportunity in India. We will engage directly with the consumers using the online platform to provide insurance products efficiently,” said Arun Balakrishnan, CEO, Berkshire India.
The firm plans to build an easy to use website to offer a “a hassle-free way” to buy insurance.