MILAN, Sept. 2 (Class Editori) - Generali could soon change the partner with whom distributing insurance policies in India, with the arrival of a top manager. Sachin Bansal, the co-founder of Flipkart, the Indian Amazon acquired from Walmart in 2018 for 16 billion dollars, would be interested in Future Generali India Life Insurance.
We are talking about the Life-insurance joint venture which was established in 2006 between Generali group and Future group, the distribution giant established by Kishore Biyani, the first retailer of the Asian country. Bansal, after having left Flipkart, is leading today the financial services company Navi Technologies and would be interested in growing in the insurance sector. Since the beginning of the year, he has been controlling DHFL General Insurance, acquired in January by the Wadhawan group, and would be now ready to make an offer in order to enter the equity of the investee company of Generali group. India, a country with a high growth rate, represents an interesting country for Generali, even though the company led by Philippe Donnet has not reached a growth in line with the rest of the group yet.
Today, Generali holds a share in the non-life insurance sector in India which accounts for 1.8% (even though it has to be compared to huge figures), while in the life-insurance one still lags a bit far behind (with a share of 1.4%). However, the aim is growing quickly. Two years ago, in 2018, the insurance group from Trieste chose to increase its shareholding (from 25.5% to 49%) in the historical joint venture established with Future Group. An operation worth €120 million, which has leveraged on the decision of the Indian government to raise the investment threshold allowed to foreign companies, up to 49% indeed.
In the equity of Future Generali India Life Insurance, the joint venture Life-insurance, there are three shareholders: Future Group, which holds 34%, Industrial Investment Trust Limited (IITL), which holds 16.88%, and Generali which holds the remaining share of 49%.
The aim of Bansal would be acquiring shares which are today held by Future Group; the latter, instead, would like to disinvest, as it seems. Bansal, which left Flipkart in 2018, co-established the financial services startup Navi Technologies in December of that year, together with Ankit Agarwal. Navi Technologies is therefore the new business activity – this time in the financial services sector – chosen by Bansal after having left Flipkart, soon after its acquisition by the global retail sale giant Walmart.
In January of this year, the financial arm of Navi Technologies would have asked to Reserve Bank of India for the authorization of a banking license; however, the project to develop the insurance business would be already in an advanced phase. Moreover, according to leaks by the local press, also negotiations with Future Group (which has chosen UBS as advisor) would be in an advanced phase and a formal proposal should take place in the following weeks.
In the meantime, there is a focus on what effects could Generali experience in the country after the possible appointment of the new partner. Future Group is the first retail operator in India, a giant with 45 million customers and 2,000 stores. A huge distribution network, which Generali has started to develop, as it has been proven by the development recorded in the non-life insurance sector in particular. In the last 4 years, the annualized growth rate of the premiums of the non-life insurance company amounted at 20%. Plans that, whether Bansal's move would be effective, should have to be probably changed; however, it is also evident that the entrepreneurial capacities of the manager could allow Generali to make a decisive step forward in the country.
And the desire of the Italian group of growing in India continues to be strong despite the country is experiencing difficult times nowadays due to the pandemic, which made the GDP falling by 23.9% in the second quarter. "The new Generali strategy is focused on high-potential insurance markets and India will play a significant role in our expansion plan in Asia," Jaime Anchustgui, CEO International of Generali, had stated, by talking about the operation which led the company to focus more on the joint venture in 2018. He also added that Generali Future was ready to offer insurance solutions to the whole country with a focus on the digital sector. And in this field, the experience of Bansal could surely be useful.
(Source:Class Editori)
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