Is a new insurance joint venture in India in the making? Just a couple of days ago, insurance giant Allianz SE and Bajaj Finserv announced they were ending their 24-year-old life as well as generally insurance joint ventures. Allianz is reportedly in dialogue with Mukesh Ambani-owned Jio Financial Services to forge a new partnership in the insurance sector.
Ambani has big plans in the financial services space and already has a venture with Blackrock in the asset management space. Earlier this month, Jio Financial had also acquired State Bank of India's stake in their payment bank venture. In Reliance's annual general meeting back in 2023, Ambani had spelt out plans to also enter the insurance space.
"Jio Financial Services will enter the insurance segment to offer simple yet smart life, general and health insurance products through a seamless digital interface, potentially partnering with global players," he had said.
Jio Financial Services already operates an insurance broking unit to distribute products of most insurance companies in the country.
Allianz was present in India through separate life and general insurance partnerships with non-banking finance company Bajaj Finserv.
Earlier this week, Bajaj Finserv announced it would acquire the 26 per cent interest owned by Allianz in Bajaj Allianz General Insurance Company for ₹13,780 crore and Bajaj Allianz Life Insurance Company for ₹10,400 crore. Bajaj Group would then get 100 per cent ownership of the two companies.
Even as Allianz was exiting the insurance ventures with Bajaj, it had indicated that India would continue to be one of its growth markets and made it clear it wanted to be present in the country's insurance space not merely as an investor, but operator.
"Allianz will explore new opportunities that strengthen its position in the market and expand its potential to serve not only as an investor but also as an operator," it said.
In the Union Budget earlier this year, the government raised the foreign direct insurance limit in the insurance sector to 100 per cent from 74 per cent, thus opening the doors for global insurance companies aiming to operate their own firms in the country and not just through local partnerships.
"As the proceeds become available, Allianz will consider options for their deployment that support the company's strategic ambitions, in particular the reinvestment of sale proceeds into potential new opportunities in India," Allianz said.
According to an Economic Times report, talks between Allianz and RIL officials have been ongoing for months. A formal announcement between Allianz and Jio Financial may come once approvals are received from the Competition Commission of India and the Insurance Regulatory and Development Authority of India.
Neither RIL nor Allianz have so far officially commented on the report indicating talks between the two.
