·Zurich will acquire an additional stake of up to 19% over time. It is anticipated that this transaction will represent the largest foreign insurer investment in the Indian insurance sector since the regulatory changes allowing majority foreign ownership came into effect in 2021
Zurich:
Insurance multinational Zurich Insurance Group (Zurich) based in Zurich today announced a strategic alliance with Kotak Mahindra Bank Limited. India’s third largest private sector bank by market capitalization, through the proposed acquisition of a 51% stake in Kotak Mahindra General Insurance Company (Kotak General Insurance) for USD 488 million, through a combination of fresh growth capital and share purchase.
Further, Zurich will acquire an additional stake of up to 19% over time. It is anticipated that this transaction will represent the largest foreign insurer investment in the Indian insurance sector since the regulatory changes allowing majority foreign ownership came into effect in 2021.
Zurich Insurance will infuse about Rs 1609 crore fresh growth capital in Kotak General Insurance as part of the deal, which values the insurer at more than Rs 7900 crore, on a post money valuation.
The deal is expected to be closed by June 30 subject to customary conditions and regulatory approvals.
“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 Tulsi Naidu, Zurich’s Chief Executive Officer of Asia Pacific.
“With Kotak Mahindra Group’s high-quality franchise and expertise in Indian financial services, and Zurich’s deep distribution experience and class-leading capabilities in retail and commercial insurance, we are confident this partnership can bring strong innovation, know-how, and excellent customer experiences to the Indian general insurance market,” said Naidu.
Dipak Gupta, MD & CEO, Kotak Mahindra Bank Limited said, “The alliance brings together two trusted and respected brands. The combined expertise and resources of respective firms will enable us to provide innovative solutions to meet the evolving needs of our customers. Kotak Mahindra Group’s pan India distribution presence and Zurich’s distinct global capabilities in digital assets, B2B and B2C formats has potential to create a transformational impact for the Kotak General Insurance franchise delivering innovation efficiently and rapidly in the Indian General Insurance space.”
India is expected to become the third largest global economy by 2030 and presents significant untapped potential for the development of insurance solutions. The country’s rapid economic growth, coupled with low levels of insurance penetration, increasing awareness, strong digital infrastructure and expanded foreign ownership rules make it one of the most attractive and fastest growing insurance markets globally.
Strongly aligned with Zurich’s strategy, Kotak General Insurance, established in 2015, is focused on building a differentiated value proposition to customers by delivering innovative products and best-in-class experiences through a digitally enabled journey.