XL Group acquires 20% stake in Indian broker

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This article is reprinted courtesy of Eames Consulting Group newsletter.

XL Group has increased its Indian footprint with the acquisition of a minority stake in Indian broker, Mahindra Insurance Brokers Ltd (MIBL).

XL will acquire a total 20 percent stake in MIBL from existing shareholder, Leapfrog Financial Inclusion Fund, with the deal valuing the broker at around $200mn.

Since inception in 2004, MIBL has serviced over eight million insurance cases, safeguarding the livelihoods of millions across rural India by protecting their assets and loans taken for buying tractors and vehicles.

Through its subsidiary Inclusion Resources Private Ltd, Leapfrog Financial holds a 15 percent equity stake in MIBL and is set to purchase an additional five percent stake in the broker’s parent company, Mahindra & Mahindra Financial Services, taking its total equity shareholding to 20 percent. It will then sell its entire stake in the broker to XL.

Greg Hendrick, president, P&C insurance and reinsurance at XL Catlin, 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.”

Jaideep Devare, managing director of MIBL, said: “We want to introduce insurance ideas from the global markets, suitably adapted for the Indian market.”

“MIBL will continue to focus on the rural and semi-urban areas, where insurance penetration is low and the need for social and economic progress that insurance inclusion can bring is high,” he continued.

In January, XL Catlin received approval from the Insurance Regulatory and Development Authority of India (Irdai) to open a full licensed reinsurance branch office in Mumbai, having had service operations in India since 2004, when it opened its first office in Gurgaon, later adding an office in Bangalore.

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