#None #India #Life Insurance #Manulife #Mahindra

Manulife and Mahindra Establish Joint Venture in India

In a significant collaboration aimed at catering to the robust insurance market in India, Manulife Financial Corporation and Mahindra & Mahindra Ltd. have agreed to form a 50:50 life insurance joint venture, pending necessary regulatory approvals. This move reflects both companies' commitment to bolstering their presence in India, one of the world’s most rapidly evolving insurance landscapes.

A Vision for Inclusive Growth

The primary objective of this joint venture is to provide tailored long-term savings and protection solutions to meet the diverse needs of India's vast population. This initiative aligns with India’s ambitious vision for insurance accessibility termed “Insurance for All” by the year 2047. The partnership aims to leverage Mahindra's extensive reach into rural and semi-urban areas while incorporating Manulife's proven expertise in urban markets.

Capital Commitment and Future Plans

The joint effort will see both companies committing a total capital of up to USD 400 million (equivalent to approximately INR 3,600 crores), with plans to invest USD 140 million (around INR 1,250 crores) in the initial five years. This financial commitment underscores their confidence in the substantial growth potential anticipated in the Indian insurance sector.

Market Potential and Growth Statistics

India’s life insurance market has surged beyond USD 20 billion in new business premiums, boasting a compound annual growth rate (CAGR) of 12% over the past five years. Despite this growth, there remains a significant protection gap and low levels of insurance penetration, indicating a substantial opportunity for future expansion. Experts predict that India can become the globe’s fastest-growing life insurance market over the next decade, fueled by several promising megatrends including robust GDP growth and a rising middle class.

Statements from Leadership

Phil Witherington, President and CEO of Manulife, emphasized the importance of this milestone, stating, “Today marks an important milestone as we seek to enter one of the world's fastest growing insurance markets – India. This will further strengthen our diverse portfolio.” He expressed optimism about utilizing Mahindra Group’s distribution strengths in conjunction with Manulife’s extensive agency recruitment capabilities.

Dr. Anish Shah, Group CEO of Mahindra, remarked, “The Mahindra brand’s strength and deep distribution capabilities make life insurance a logical extension of our goal to build a comprehensive financial services portfolio. Manulife is the perfect partner, given their global expertise in insurance products.” He believes this venture will enable them to efficiently create a customer-centric insurance provider.

Next Steps and Legal Counsel

Following the announcement, the teams from both companies will collaborate to apply for the necessary insurance licenses. The partnership also sees the involvement of legal and financial advisors: Debevoise & Plimpton LLP will serve as legal counsel for Manulife, while Kotak Investment Banking will take on the role of financial advisor, and AZB & Partners will counsel the Mahindra Group.

About Mahindra Group

Founded in 1945, the Mahindra Group is a prominent multinational federation noted for its leadership in sectors such as farm equipment and financial services. With over 324,000 employees across more than 100 countries, Mahindra is rooted in enhancing rural prosperity while promoting urban living. Learn more about Mahindra at www.mahindra.com.

About Manulife Financial

Manulife is a leading financial services provider globally, headquartered in Toronto, Canada. The company operates under the Manulife name in Canada and Asia, and as John Hancock in the United States. Manulife offers a range of products and solutions that facilitate improved decision-making for clients. More information about Manulife can be found at manulife.com.

In conclusion, this new venture between Manulife and Mahindra is expected to make a notable impact on the Indian life insurance landscape, addressing customer needs and promoting financial well-being.