Mahindra Finance said global insurance major XL Group will take a 20% stake in its subsidiary Mahindra Insurance Brokers Ltd, including the 15% currently held by LeapFrog Financial Inclusion Fund.
“XL Group will help support MIBL’s endeavours to increase insurance awareness and penetration in underpenetrated markets and across under-served customers in rural India,” the group said.
It said the company’s valuation is at Rs.1,300 crores (approx. US$ 200 million).
The company distributes insurance products in rural and semi-urban India. The Mahindra Group has a significant footprint in rural India through the sale of utility vehicles, tractors, commercial vehicles, two-wheelers, and rural home loans.
XL Group has a large shared service operation presence in India, at Gurugram and Bengaluru, operating under the brand XL Catlin.
It provides business and underwriting support, claims administration, actuarial services, finance and accounting, and more.
The Group also has a fully licensed reinsurance branch office also operating under the XL Catlin brand, in Mumbai.
“Since inception in 2004, MIBL (Mahindra Insurance Brokers) has serviced over 8 million insurance cases, safeguarding the livelihoods of millions across rural India by protecting their assets and loans taken for buying tractors and vehicles,” said Mahindra Finance.
Greg Hendrick, President, P&C Insurance and Reinsurance, XL Catlin, said, “This minority investment plays to our commitment to emerging markets and to supporting insurance penetration in developing economies, helping improve economic resilience by closing the gap between economic and insured losses. It will also provide us a chance to better understand the primary retail insurance and distribution landscapes in the rapidly developing Indian market.”
MIBL would continue to focus on the rural and semi-urban areas, where insurance penetration is low.