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Edelweiss gets regulatory nod to divest 100% in insurance broking biz
Photo Credit: 123RF.com

Financial services firm Edelweiss Group on Monday announced the divestment of its majority stake in Edelweiss Gallagher Insurance Brokers Ltd (EGIBL), post approval from the Insurance Regulatory and Development Authority of India (IRDAI).

"The business will transition to the Gallagher brand in the coming months. Edelweiss Group will focus on growing its life and non-life insurance businesses, which have been among the fastest growing in the industry," the company said in a statement.

“This move also brings to us the flexibility to reallocate capital, which post this transaction and the strategic partnership in our Wealth Business, is ample.

We now have adequate capital and a stronger balance sheet and look forward to scaling up our fast-growing life and non-life insurance businesses, as India turns a corner post the pandemic," said Rashesh Shah, Chairman, Edelweiss Group.

First announced in July this year, Edelweiss said it will exit its insurance broking business with the divestment of a 70% stake in EGIBL.

US-based Arthur J Gallagher & Co, a brokerage and risk management services company, which holds 30% stake in the business, will now be acquiring all the remaining shares.

Founded in 1927, Gallagher is the fourth-largest insurance broker in the world. This partnership marked Gallagher’s maiden presence in the Indian insurance market.

With branches in Mumbai, Delhi, Kolkata and Bengaluru, EGIBL offers general insurance solutions to clients across India.

The business operates across four areas; corporate, affinity and association, reinsurance and global and digital solutions.

Edelweiss Insurance Brokers, which began operations in 2005, acts as a composite broker.

The firm provides services such as risk management and monitoring, claims management services and designing insurance programmes.

The insurance broking arm was earlier part of Edelweiss’ wealth and advisory platform. Since last year, it has been operating as a standalone business after being separated from the wealth management business.

Last year, the group sold a majority stake in Edelweiss Wealth Management to Asian investor PAG for $300 million (Rs 2,200 crore).

Edelweiss as a group has been striking partnerships for its three different lines of business--credit, investment advisory and insurance.

It has already established partnerships for its credit and life insurance businesses, with a strategic investment of $250 million (around Rs 1,800 crore) by CDPQ in the former and Tokio Marine’s 49% holding in the latter.

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