The Dutch Insurer AEGON will continue to maintain its interests in the Indian Insurance sector despite its partner Religare Enterprises recent exit from the joint venture (JV).
Religare Enterprises recently sold its 44% stakes to Bennett, Coleman and Co (BCCL) while AEGON will move forward with its decisions to remain invested in the Indian Insurance sector by increasing its shares holding to 49%.
In the documents submitted by Religare to Bombay Stock Exchange, the company officials commented, “BCCL would obtain the whole 44% share holdings from Religare, while AEGON plans to augment its stake to 49% in the Indian Insurance JV firm.”
The officials further said, “The transaction is awaiting regulatory approvals from IRDA and CCI, FIPB.”
AEGON has joined the bandwagon of offshore insurance companies such as Bupa, Prudential (UK) and AXA (France). It will increase its current stakes from 26% to 49%, under the Foreign Direct Investment norms, laid down by the Indian government in the current FY.
The new partner in the Insurance JV – BCCL- also owns 30% stake in leading Indian Newspapers companies like The Economic Times and Times of India. The financial details of the new partnership were however not disclosed.
Despite the life insurance industry experiencing a slump of 5.84% in revenues from selling new policies worth Rs. 1,13,140 crore in previous FY 14-15, AEGON Religare reported a 41% increment in their new business premium income worth Rs 207.5 crore as compared to the earlier Rs 147 crore in FY 2013-2014- as per the Life Insurance Council report.
AEGON Religare operates in India across 52 cities, with 67 branches, employee strength of 1,670, and serves 3.5 Lakh customers.
As per the latest industry reports, capital worth Rs 1,310 crore has been invested in the company by its promoters.
The JV began to operate in July 2008, and incurred a loss of Rs 34.16 crore, in the initial nine months, ending on December 31, 2014. However, the company is gaining a boost in its income with expanding customer base, despite the fact it takes 8-10 years for the Insurance companies to gain real profits.
Source: This news was published on May 13, 2015 in economictimes.indiatimes.com under the title: “Religare to exit from Aegon Religare Life Insurance”