"Consolidation is imminent in life insurance"

Gerry Grimstone, Chairman of Standard Life plc, is confident that the British company's life insurance JV with HDFC will be profitable. On a recent visit to India, he spoke to BT's Anand Adhikari. Edited excerpts:

On the fragmented life insurance market in India: I think the nature of this market is that eventually you will have consolidation. Some of the weaker insurers will find it difficult to carry on and may go with a stronger player. But certain companies like ours are very close to a tipping point and will soon churn out profits.

On the policy framework in India: We are all looking forward to the passing of the Insurance Bill. This will be a vital step for insurance companies to move towards IPOs. But before that you need a good business model and a route to become profitable. You also need a consistent landscape of regulations. We have seen a lot of changes in regulations in the past. You cannot invite investors to invest in insurance companies if the regulatory background keeps changing.

On commission structure in insurance: We are a huge supporter of no commissions to agents. We were the first company in Britain to stop paying commissions almost six years ago. I believe that insurance and savings products should be sold according to what a customer wants and not based on the commissions. You cannot remove commissions in India overnight. This can be only done in a phased manner.