In a regulatory filing to the stock exchanges, Mahindra & Mahindra Ltd has announced that it will form a 50:50 joint venture to establish a life insurance company in India.
According to the stock exchange filing, the total capital commitment for the venture will be Rs 7,200 crore, with each company investing Rs 3,600 crore. The joint venture is expected to begin with an initial investment of Rs 1,250 crore over the first five years, after which the investment will be stepped up.
The announcement builds on the success of Mahindra Manulife Investment Management, their mutual fund joint venture launched in 2020. Mahindra and Manulife will jointly apply for an insurance licence and initiate operational planning, according to the announcement.
The announcement noted that the joint venture’s vision is to become the Number 1 life insurance company for rural and semi-urban India, while also serving urban customers through leadership in protection solutions. It aims to offer long-term savings and protection products tailored to India’s diverse and growing population, aligning with the national goal of achieving “Insurance For All” by 2047.
“This is a logical extension of our goal to build a comprehensive financial services portfolio,” Mahindra Group MD & CEO Dr Anish Shah said, adding, “Manulife is a natural partner for us given their global capabilities in insurance and their track record of success. With a focus on leveraging technology, this joint venture will build an efficient, customer-centric insurer in India, creating meaningful value for our shareholders”.
The partnership seeks to build a customer-centric insurer driven by technology and innovation by combining Mahindra’s extensive rural and semi-urban reach with Manulife’s global expertise and quality agency capabilities. The model leverages Mahindra’s strong brand and execution capabilities alongside Manulife’s deep experience in insurance products, underwriting, and reinsurance.
Manulife President & CEO Phil Witherington called the agreement “an important milestone” in the company’s Asia growth strategy. “This will strengthen our diverse portfolio and position us for tremendous growth in a mega economy of the future. We have a trusted partner in Mahindra, with whom we already have a successful asset management collaboration, and we see tremendous opportunity to build on our efforts by combining their deep distribution network with our insurance expertise,” Witherington said.