MUMBAI: The Swiss insurance major Zurich Insurance Group has picked up a controlling 70% in Kotak General Insurance for Rs 5,560 crore, becoming the first foreign insurer to enter the domestic market since the foreign direct investment rules were amended in December of 2021.
Following the completion of the deal which is subject to regulatory and shareholder approvals, Zurich and Kotak will jointly build a leading general insurer in India, bringing together Zurich’s global insurance leadership and scale with Kotak’s local expertise and reach, the companies said in a joint statement on Wednesday.
Acquisition helps Zurich enter an important growth market and reflect its continued progress in the Asia Pacific markets.
The stake is being sold by Kotak Mahindra Bank, the sole promoter of the company which also has a life insurance vertical.
“Zurich has acquired a 70% stake in Kotak General Insurance for a total consideration of Rs 5,560 crore (around $670 million), through a combination of fresh growth capital and share purchase. The transaction marks the largest foreign investment in the domestic general insurance market and is the first by a foreign insurer since the FDI limit was raised from 49% to 74% in 2021,” the joint statement said.
Zurich is fully committed to fostering the development and expansion of India’s insurance sector in keeping with the Insurance Regulatory and Development Authority’s goal of achieving the national objective of insurance for all by 2047, the statement added.
“The acquisition of Kotak General sets the way forward for Zurich to be a leading player in a very significant growth market that is India. This is a key strategic step for Zurich,” said Tulsi Naidu, the chief executive of Asia Pacific, Zurich Insurance Group.
“India offers immense potential, and together with Kotak, we are committed to supporting its growth and development. We have the global scale, strong expertise in managing complex risks, digital capabilities and technology leadership to bridge the insurance protection gap. Our goal is to build resilience among customers and businesses through simple and innovative solutions,” he added.
Shanti Ekambaram, the deputy managing director at Kotak Mahindra Bank expressed the hope that the partnership with Zurich will unlock the next phase of growth for Kotak General and create a leading non-life insurance franchise.
Suresh Agarwal, the managing director of Kotak General, said the transaction was announced in November 2023 and was subject to customary conditions precedent including regulatory approvals from the Reserve Bank, Irdai, and the Competition Commission.
The Zurich based insurer is a multi-line insurer serving people and businesses in over 200 countries for the past 150 years.