Berkshire Insurance

Berkshire Insurance: Is it prudent to buy insurance on promise of meeting celebrity?

MUMBAI: The whole world knows by now that Berkshire Insurance has just opened office in India by not opening an office. That's how the company website puts it.

In another first, the company also managed to sell hundreds of motor insurance policies online for an evening meeting with Warren Buffett, the legendary chairman and CEO of Berkshire Hathaway, its global parent company.

However, as the euphoria dies down, many insurance players are wondering how prudent it was to sell a motor insurance policy on the promise of a meeting with a celebrity-the world's third richest man and the most successful investor ever.

"It is not correct. In insurance you can't give incentives. It is against the principles of insurance. It is like an insurance agent giving a Diwali gift," said a senior official at Insurance Regulatory and Development Authority.

"It's purely a gimmick, which is not known to the insurance industry so far. We are not in favour of it. It's a kind of inducement that is not permitted by concerned regulations...Moreover, in the absence of clarity about the insurance amount that qualifies for meeting the celebrity, some people might feel misled," said Kamalji Sahay, MD & CEO Star Union Dai-ichi Life Insurance.

Berkshire Insurance, Indian arm of Berkshire Hathaway, in its bid to encash on the cult status of Buffett and his much-publicised annual meal with the highest bidder for million dollars, has advertised that policyholders of the company would get a chance to listen to the Oracle in Delhi if they buy a motor insurance policy from the company.

"If we have to offer our product, we would do on the basis of our product features and services. The choice should be based on the product strengths," said Gaurav Garg , MD & CEO, Tata AIG General Insurance.

S K Sethi, vice-president, Insurance Foundation of India, also felt the same: "We are against it. Any incentive in cash or kind is an inducement. If they want to arrange a lecture or get together, it shouldn't be at such public place."

However, not all see red. "It's not completely ethica,l but then it's not against the letters of the law also," says S B Mathur, secretary general, Life Insurance Council.