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Edelweiss Group to exit insurance broking business by selling stake to US JV partner
Photo Credit: VCCircle

Edelweiss Group, a financial services entity, on Friday said it will exit its insurance broking business with the divestment of a 70% stake in Edelweiss Gallagher Insurance Brokers Ltd (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, Edelweiss Group said.

Simon Matson, Gallagher CEO of global broking in Europe, the Middle East and Asia, said: “Gallagher has ambitious growth aspirations in Asia, and Edelweiss’s insurance broking business is a fantastic addition to our global team.”

The transaction is subject to approvals by the Insurance Regulatory and Development Authority of India (IRDAI). Two years ago, Mumbai-based Edelweiss Financial Services Ltd had sold its minority stake in the wholly-owned subsidiary, then known as Edelweiss Insurance Brokers Ltd, to Gallagher.

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.

The 100% control of EGIBL will help enable a deeper integration with Gallagher’s global operations, helping scale up its business significantly. It will also give clients access to a larger suite of insurance products and services, the company said.

The business will rebrand to Gallagher 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.

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 1800 crore) by CDPQ in the former and Tokio Marine’s 49% holding in the latter.

Founded in 1927, Gallagher is the fourth-largest insurance broker in the world.

With operations in 56 countries, it offers client service capabilities in more than 150 countries around the world through a network of correspondent brokers and consultants and over 30,000 employees globally.

The group provides insurance broking, risk management products and consulting services to its clients.

Other large insurance brokers such as Marsh and Aon also have footprints in India.

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