Zurich Insurance finalizes purchase of 70% stake in Kotak Mahindra General Insurance in a deal worth ₹5,560 crore

Zurich Insurance Company Ltd has successfully purchased a 70% share in Kotak Mahindra General Insurance Company Limited.

 Zurich bought 70% of Kotak General Insurance for ₹5,560 crore (USD 670 million). This investment consists of both fresh capital infusion and buying of shares.

This marks the biggest overseas investment in India's general insurance industry and the initial significant investment post the increase of the FDI cap from 49% to 74% in 2021 in the insurance sector.

The acquisition process, which started with initial disclosures on November 2, 2023, and further updates on February 23, 2024, and June 5, 2024, has now been completed after meeting all necessary conditions, including obtaining required regulatory approvals.

Acquiring Kotak General Insurance paves the path for Zurich to become a major player in the rapidly expanding Indian market. Tulsi Naidu, CEO of Asia Pacific at Zurich Insurance Group, described this as a crucial strategic move for Zurich. In addition, he stated that “India’s insurance market offers immense potential, and together with Kotak, we are committed to supporting its growth and development. We have a global scale, strong expertise in managing complex risks, digital capabilities, and technology leadership to bridge the insurance protection gap. Our goal is to build resilience among Indian customers and businesses through simple and innovative solutions".

On June 19, Kotak Mahindra Bank's stock price increased by 1.34% to reach ₹1742.65 on the Bombay Stock Exchange (BSE). According to BSE data, the company has a market capitalization of ₹3,46,430.33 crore.

According to the Managing Director & CEO of Kotak Mahindra General Insurance, Suresh Agarwal, the purchase will help the company improve insurance penetration in the country through technology.

He further added "This represents a significant step forward in promoting insurance accessibility in India by leveraging technology, expansion, and incorporating international best practices into our operations to offer enhanced experiences to our clients. We are dedicated to creating new standards for the general insurance sector".