It will become the majority shareholder of Future Generali India Insurance Company Limited and Future Generali India Life Insurance Company Limited, following the approval of relevant regulators. In the general insurance business, Generali has agreed to acquire from Future Enterprises Limited 25 per cent of the shares of Future Generali India Insurance (FGII) for a consideration of around 145 million euros, Generali said in a statement. ”After closing, Generali will hold a stake of around 74 per cent in FGII. FGII is among the fastest growing general insurance companies in the market with a diversified product and distributor portfolio; as of March 2021 (fiscal year end for Indian insurance companies), it reported around 450 million euro of premiums,” it said.
Foreign partner Generali plans to increase its stake in its life and non-life insurance businesses to up to 74% after debt-ridden Future Group dilutes its stake. The government modified the Insurance Amendment Bill, 2021, last year to raise the foreign direct investment (FDI) ceiling in the insurance sector to 74% from 49%. Since the new foreign ownership cap went into effect, Generali is the only multinational insurer to step up to a majority stakeholder position in both of its Indian joint ventures.
Regarding the life business, it said, an agreement has been signed to acquire the entire stake (around 16 per cent) held by Industrial Investment Trust Limited (IITL) in Future Generali India Life (FGIL) for a consideration of around 26 million euros. FGIL reported around 150 million euros of gross written premiums as of March 2021. ”In addition, Generali will subscribe to a preferential allotment of shares in FGIL (around 21 million euro). As a result, following the closing of the transaction and completion of the preferential allotment, Generali will hold a stake of around 68 per cent in FGIL, which may increase further to 71 per cent by the end of 2022, following further preferential allotment of shares,” it said. Following the completion of all the components of the transaction, it said, the total estimated impact on the group’s regulatory solvency ratio will be approximately 4x in 2022.
”Increasing Generali’s stake in our Indian Life and P&C insurance businesses represents a further step ahead in our growth journey in this high potential market. ”With an expected double-digit annual growth rate, India’s insurance market offers considerable opportunities, and we look forward to deepening our presence in this geography, becoming Lifetime Partners to an increasing share of Indian customers,” Jaime Anchústegui Melgarejo, CEO International, Generali Group said. Earlier in the day, Future Group too made an announcement to this effect.
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