Generali to increase stake in insurance JVs with Future Group
Photo Credit: Shah Junaid/VCCircle

Italian insurer Generali Group is set to increase its stake in two insurance joint ventures with the Kishore Biyani-led Future Group.

According to a stock exchange disclosure, Generali has signed an agreement with Future Group to hike its shareholding from 25.5% to 49% in Future Generali India Life Insurance Co. Ltd and Future Generali India Insurance Co. Ltd.

Generali said in a separate press statement that it has committed to invest up to €120 million (Rs 958 crore) through this transaction.

The transaction is expected to close during the second half of this year subject to regulatory approval and customary closing conditions.

Generali said the long-standing partnership with Future Group currently generates gross written premiums of €375 million (about Rs 3,000 crore) that have been growing steadily year after year.

"We see large potential for growth in India as part of our strategic expansion plan in Asia,” said Frederic de Courtois, Generali Group chief executive officer of global business lines and international.

India’s foreign direct investment (FDI) norms allow foreign insurers to acquire up to 49% stake in insurance ventures.

In 2015, AXA Group had increased its stake to 49% in its insurance joint ventures with Bharti Enterprises.

In 2016, Canada’s Sun Life Financial Inc had increase its stake from 26% to 49% in its Indian life insurance joint venture with the Aditya Birla Group

In 2013, L&T General Insurance, an arm of Larsen & Toubro, and Future Generali India Insurance Ltd had signed an agreement to merge the two firms. However, the plan was called off a year later.

As of 31 March 2017, Future Enterprises Ltd held 25.51% stake in Future Generali India Insurance Co. Ltd with Shendra Advisory Services Pvt. Ltd owning 48.99%.

As per Tuesday's release, Future Enterprises owns 49.82% in Shendra Advisory Services.

As for Future Generali India Life Insurance Co. Ltd (FGILICL), Future Enterprises held 3.83% stake as of March 2017. Sprint Advisory Services Pvt. Ltd (49%) and Industrial Investment Trust Ltd (21.67%) owned the rest. Future Enterprises owned 49.81% in Sprint as of June 26.

In 2013, Mumbai-based ITIL had made an investment of Rs 340 crore in Future Generali India Life Insurance Company Ltd to acquire 22.5% of its equity capital.

IITL is a listed investment firm registered as a non-banking financial company.

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