India’s Axis Bank is in talks to acquire a stake in Go Digit Life Insurance, two sources with direct knowledge of the matter told Reuters, as the country’s third-largest private lender seeks to tap into the fast-growing insurance market. .

Axis plans to take a 10% stake for about $9 million in the upcoming life insurance business, valuing the business at $90 million, said two of the sources, who declined to be named because the talks were private.

The move comes after India’s top lender HDFC Bank said in a stock market filing last week that it plans to buy a 9.94% stake in Go Digit Life for up to 700 million rupees ($9 million).

Digit Startup, which already operates in the general insurance business, is entering the life insurance market with its “Go Digit Life” project.

A Digit spokesman declined to comment, saying the company had not yet received a license for its life insurance business. Axis did not respond to Reuters’ request for comment.

Go Digit General Insurance, Digit’s general insurance business, says it is valued at $4 billion and is backed by Canadian billionaire Prem Watsa and Sequoia Capital. It offers products such as health, travel and auto insurance.

Axis’ plans underscore growing interest in India’s lucrative insurance business from private lenders, one of the sources said, adding that a partnership with Digit could help Axis fulfill its insurance ambitions.

India’s life insurance market, which is the tenth largest in the world, remains largely untapped. Life insurance penetration – which is measured by a country’s life insurance premiums as a percentage of its gross income – grew to 3.2% in fiscal 2021, from 2.15% two decades ago, according to data from the insurance regulator of India. .

While Axis currently offers some insurance products in partnership with Max Financial, the Digit deal could give Axis better insight into the online insurance industry and allow it to improve access to insurance customers and its banking offerings, the source said.

Insurance companies in India are increasingly wooing customers with online offerings, promising instant policy delivery and easy claims. Selling insurance through traditional agents remains popular in India, especially in smaller cities.

Go Digit General Insurance recently filed to raise at least $440 million through an initial public offering, eyeing a $5 billion valuation. Its founder Kamesh Goyal is an industry veteran who previously headed the Indian venture of Germany’s Allianz.

This story has been reprinted from a wire agency feed without text modification. Only the headline has been changed.

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