Axis Bank’s logo is seen next to ATM machines at its corporate headquarters in Mumbai, India July 25, 2017. REUTERS/Danish Siddiqui
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MUMBAI, Aug 30 (Reuters) – India’s Axis Bank ( AXBK.NS ) is in talks to buy a stake in Go Digit Life Insurance, two sources with direct knowledge of the matter told Reuters, as the third-largest lender the country’s private sector seeks to tap a rapidly growing insurance market.
Axis is planning to take a 10% stake for about $9 million in the start-up’s upcoming life insurance business, effectively valuing the business at $90 million, said the two sources, who declined to be identified. declined to be named as the talks were private.
The move comes after India’s largest private lender HDFC Bank ( HDBK.NS ) said in a stock market disclosure last week that it planned to buy a 9.94% stake in Go Digit Life for up to 700 million rupees ($9 million).
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Start-up Digit, which is already in the general insurance business, is entering the life insurance market with its venture Go Digit Life.
A Digit spokesman declined to comment, saying the company had not yet obtained a license for its life insurance business. Axis did not respond to Reuters’ request for comment.
Go Digit General Insurance, Digit’s general insurance business, says it is valued at $4 billion and is backed by Canadian billionaire Prem Watsa and Sequoia Capital. It offers products such as health, travel and automobile coverage.
Axis’ plans underscore the growing interest in India’s lucrative insurance business from private lenders, one of the sources said, adding that the partnership with Digit could help Axis fulfill its insurance ambitions.
India’s life insurance market, the tenth largest in the world, remains largely untapped. Life insurance penetration – which is measured by the country’s life insurance premium as a percentage of its gross domestic product – rose to 3.2% in the fiscal year to 2021, up only slightly from 2.15% two decades ago , according to data from India’s insurance regulator. .
While Axis currently offers several insurance products in partnership with Max Financial, the Digit deal could give Axis a better understanding of the online insurance industry and allow it to improve its exposure to insurance customers with its own banking offerings, it said. the source.
Insurance companies in India are increasingly luring customers with online offers, promising instant policy issuance and easier claims. Selling insurance through traditional agents remains popular in India, especially in small towns.
Go Digit General Insurance recently filed to raise at least $440 million through an initial public offering, eyeing a $5 billion valuation. Its founder Kamesh Goyal is an industry veteran who previously headed the India joint venture of Germany’s Allianz. Read more
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Reporting by M. Sriram; Editing by Aditya Kalra and Ana Nicolaci da Costa
Our Standards: The Thomson Reuters Trust Principles.
