As part of the agreemenet, Zurich Insurance will invest approx Rs 4,051 crore to acquire a 51% stake in Kotak General Insurance through a combination of fresh growth capital and share purchase.
Acquiring additional stake
The Switzerland-based company will also acquire an additional stake of 19% within a period of three years. According to Zurich Insurance, 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, the Swiss company said in a release.
What does Kotak General Insurance do?
Established in 2015 as a fully owned subsidiary of Kotak Mahindra Bank Limited, Kotak General Insurance is an Indian general insurance franchises. The company's pan-India platform encompasses direct-to-customer digital channels, key financial institution partnerships, multiline agencies, and access to Kotak Mahindra Group’s customers.
Dipak Gupta, MD & CEO, Kotak Mahindra Bank Limited said, “The alliance brings together two trusted and respected brands. The combined expertise and resources of the respective firms will enable us to provide innovative solutions to meet the evolving needs of our customers. Kotak Mahindra Group’s pan-India ‘phygital’ distribution presence and Zurich’s distinct global capabilities in digital assets, B2B and B2C formats has potential to create a transformational ‘digical’ impact for the Kotak General Insurance franchise delivering innovation efficiently and rapidly in the Indian general insurance space.”
The transaction is subject to customary conditions precedent including regulatory approvals from the Reserve Bank of India (RBI), Insurance Regulatory and Development Authority of India, and the Competition Commission of India, Kotak Mahindra Bank said in an exchange filing.