Global insurance and reinsurance firm XL Group has agreed to acquire a 20% stake in Mahindra Insurance Brokers (MIBL), a subsidiary of Mahindra & Mahindra Financial Services which primarily serves rural and semi-urban India.
LeapFrog Financial Inclusion Fund, through its subsidiary Inclusion Resources Private (IRPL), currently holds a 15% equity stake in MIBL.
The fund will acquire a further 5% stake in MIBL from Mahindra Finance, increasing its total equity stake to 20%.
The entire capital of IRPL will then be sold to XL Group, subject to required regulatory approvals.
While the financial terms of the acquisition have not been disclosed, MIBL has been valued at INR13bn ($200m).
MIBL has been serving for 13 years as an insurance broker primarily serving rural and semi-urban India.
MIBL was founded in 2004 and since then it has serviced more than 8 million insurance cases. With the XL Group’s stake acquisition, MIBL expects to increase insurance awareness and penetration in under-penetrated markets across rural India.
XL Catlin P&C insurance and reinsurance, president, Greg Hendrick said: "This minority investment plays to our commitment to emerging markets and to supporting insurance penetration in developing economies, helping improve economic resilience by closing the gap between economic and insured losses. It will also provide us a chance to better understand the primary retail insurance and distribution landscapes in the rapidly developing Indian market."
XL Group operates in India under the brand XL Catlin, which conducts its operations from Gurugram and Bengaluru.
It offers business and underwriting support, claims administration, actuarial services, finance and accounting services. The company has a fully licensed reinsurance branch office, which operates from Mumbai.
Mahindra Finance, vice-chairman and managing director, financial services sector, president and Mahindra Group, executive board member, Ramesh Iyer said: “Mahindra Finance is one of the largest Non-Banking Financial Companies in India, with a focus on rural and semi-urban markets. The investment by XL Group, a leading global insurance and reinsurance group with expertise in emerging markets, will help increase insurance penetration and drive positive change in the lives of rural India.
“We would like to thank LeapFrog for partnering with us earlier in our shared mission of industry leadership and social impact.”
Image: XL Group acquires 20% stake in Indian company Mahindra Insurance Brokers. Photo: Courtesy of RK008/FreeDigitalPhotos.net.