The insurer gets a substantial footing in the Indian market with the purchase of a majority stake in Kotak Mahindra’s insurance arm.
Zurich has formed a strategic alliance with Kotak Mahindra Bank to enter the Indian insurance market, according to a statement issued Thursday.
The tie-up includes a proposal for Zurich to acquire a 51 percent stake in Kotak Mahindra General Insurance for $488 million, subject to regulatory approval. The Swiss insurer will acquire an additional 19 percent stake over time.
Kotak General Insurance was established in 2015 as a fully owned subsidiary of Kotak Mahindra Bank, the country's third-largest privately held bank in terms of market capitalization.
Market Opening
In 2021, India introduced regulatory changes that allowed majority foreign ownership in local insurers. The country is expected to become the third largest economy in the world by 2030, offering significant potential in terms of insurance solutions, the announcement maintained.
«India is one of the world’s most important markets with immense potential and we are pleased to be making a significant commitment with an excellent partner,» said Zurich Asia Pacific CEO Tulsi Naidu.
In the summer, a bidding war erupted over the insurance arm, with US-based Chubb also ostensibly interested in buying the business. The transaction is expected to be the largest foreign investment in the market since regulations were changed in 2021, the announcement indicated.
Betting on Growth
Kotak insurance platform stretches across the entire subcontinent, reaching a broad spectrum of client segments and regions through digital distribution, partnerships with large financial institutions, and multi-line agencies. It also has direct access to Kotak Mahindra Group clients.
