Japan-based insurer Dai-ichi Life Insurance Company
Ltd has agreed to purchase an additional 18% stake in its Indian joint venture, worth US$80m.
Dai-ichi will now have a 44% stake Star Union Dai-ichi Life Insurance Company
Ltd, while state-run Bank of India, the seller of the 18%, will remain with 30%. Union Bank of India, another state-owned bank, will have 26%. The Indian insurer is valued at around US$444m.
The transaction comes after the Indian government eased restrictions on foreign ownership, allowing foreign firms to own up to a 49% stake in Indian insurance companies, up from the previous 26%.
Canada’s Sun Life Financial Inc, British insurance companies Bupa Plc and Aviva Plc, Japan’s Nippon Life and Tokyo Marine, French firm AXA and Australia’s QBE Group and Insurance Australia Group Ltd have raised or are planning to raise their stake in insurance joint ventures in India.
In related news, Housing Development Finance Corporation Ltd and Max Financial Services Ltd have agreed to discuss a potential merger of life insurance businesses, which could create India’s largest private-owned life insurer.
India’s life insurance industry is quite crowded, with the sector dominated by state-run insurers. In terms of premium income, the top three are: SBI Life, ICICI Prudential Life Insurance and HDFC Standard Life Insurance Company
HDFC, Max Financial merger could create country’s biggest insurer
South African firm to invest in India’s Shriram life and non-life businesses
International insurer Allianz completes Asia-Pac deal