Jio Financial and Allianz will set up an insurance company
Jio Financial Services, a company owned by billionaire Mukesh Ambani, is in talks with German insurance giant Allianz SE, as per Bloomberg. The talks are aimed at forming an insurance partnership in India. The development comes as Allianz plans to wind up two of its current joint ventures in the country. The proposed partnership would set up a general and life insurance company here.
Allianz's commitment to Indian market remains strong
Despite planning to exit its ventures with Bajaj Finserv, Allianz has reaffirmed its commitment to the Indian insurance market. The Munich-based firm is currently locked in a dispute over the direction of its partnership with Bajaj Finserv. A statement from Bajaj yesterday confirmed that Allianz is "actively considering an exit" from their joint ventures, following a report by Bloomberg about the planned separation.
Jio Financial's expansion into insurance
The potential partnership with Allianz would fit well into Jio Financial's growth strategy. The company, which is headed by veteran banker K V Kamath, already runs a shadow bank and an insurance brokerage. It has also partnered with BlackRock to launch an asset management business. By foraying into the insurance sector, Jio Financial hopes to cement its position as a leading financial services provider in India.
India's insurance sector shows promising growth potential
According to data from the insurance regulator, India's insurance penetration rate (ratio of premiums to gross domestic product (GDP)) is less than half of countries like South Africa and Canada. This indicates that the sector has a lot of room to grow. The proposed partnership between Jio Financial and Allianz could leverage this opportunity, further strengthening their foothold in the Indian financial services market.
