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Zurich Insurance buys 70% stake in Kotak arm

Deal marks biggest foreign investment in general insurance market and is the first by a foreign insurer since the FDI limit was raised from 49% to 74% in 2021

Zurich Insurance buys 70% stake in Kotak arm
[Source photo: Chetan Jha]

Multinational insurer Zurich Insurance Co. has acquired a 70% stake in Kotak Mahindra General Insurance Co. for ₹5,560 crore (about $670 million) via a mix of fresh growth capital and share purchase, Kotak Mahindra Bank informed the regulators this week.

Following the completion of the transaction, Kotak General has ceased to be a wholly owned subsidiary of Kotak Mahindra Bank, which now holds the remaining 30% of the share capital, the lender said.

In due course, the non-life insurance business will adopt a new brand that will represent Zurich and Kotak as shareholders.

The transaction marks the largest foreign investment in India’s general insurance market and is the first by a foreign insurer since the foreign direct investment (FDI) limit was raised from 49% to 74% in 2021.

The deal was first announced in November last year, subject to regulatory approvals from regulators including the Reserve Bank of India, the Insurance Regulatory and Development Authority of India, and the Competition Commission of India.

Press Insider reported in February that Zurich Insurance had received the competition watchdog’s approval for the deal.

“The acquisition of Kotak General Insurance sets the way forward for Zurich to be a leading player in India’s very significant growth market. This is a key strategic step for Zurich,” said Tulsi Naidu, chief executive officer for Asia-Pacific at Zurich Insurance Group.

“India’s insurance market offers immense potential, and together with Kotak, we are committed to supporting its growth and development. We have a 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 Indian customers and businesses through simple and innovative solutions.”

Shanti Ekambaram, deputy managing director of Kotak Mahindra Bank, said, “We are excited about the partnership with Zurich as we aim to leverage our combined local knowledge and global expertise to enhance insurance coverage in India. The new entity will unlock the next growth phase for Kotak General Insurance and create a leading non-life insurance franchise that will focus on technology and scale while prioritizing customer needs.”

Suresh Agarwal, managing director and CEO of Kotak Mahindra General Insurance, said, “This milestone marks a pivotal moment for us and will catalyze our expansion in the market by offering comprehensive solutions tailored to meet the evolving needs of our diverse customer base.”

“This is a major stride in advancing our mission of enhancing insurance penetration in India through technology, scale, and bringing global best practices to our business to provide value-adding customer experiences. We are committed to setting new benchmarks for the general insurance industry,” he added.

Zurich Insurance, part of Zurich Group, is present in more than 200 countries, and is the holding company of many subsidiaries and affiliates of the Zurich Insurance Group, except for the Zurich Insurance Group’s property loans and banking activities.

Kotak Mahindra General Insurance offers non-life insurance products such as vehicle, home, property, and commercial insurance.

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