Mumbai, India – Mahindra & Mahindra (M&M) and Manulife Financial Corporation have announced a strategic agreement to establish a 50:50 life insurance joint venture in India. The venture, which is subject to regulatory approval, aims to capitalize on India's rapidly growing insurance market and enhance the financial well-being of customers across the country.
The partnership seeks to become the leading life insurance provider in rural and semi-urban India, while also serving urban customers with innovative protection solutions. By combining Mahindra's extensive distribution network in rural areas with Manulife's expertise in agency distribution and insurance products, the joint venture is poised to offer tailored, long-term savings and protection solutions to meet the diverse needs of India's population. This aligns with the Indian government's vision of "Insurance for All" by 2047.
Both shareholders have committed a total capital investment of up to US$400 million (Rs 3,600 crores), with an expected initial investment of US$140 million (Rs 1,250 crores) from each partner within the first five years. This financial commitment underscores the confidence both companies have in the growth potential of the Indian life insurance market.
India's life insurance market has experienced substantial growth, surpassing US$20 billion in new business premiums and demonstrating a compound annual growth rate (CAGR) of 12% over the past five years. Despite this expansion, the country's insurance penetration remains low, indicating a significant protection gap and substantial opportunities for future growth. Manulife estimates that India is on track to become the fastest-growing life insurance market globally over the next decade and is projected to become the fourth largest worldwide.
Phil Witherington, President and CEO of Manulife, stated that the joint venture marks an important milestone as the company seeks to enter one of the world's fastest-growing insurance markets. He emphasized that this partnership will strengthen Manulife's diverse portfolio and position the company for tremendous growth in a major economy. Anish Shah, Group CEO & Managing Director of Mahindra Group, noted that life insurance is a logical extension of their goal to build a comprehensive financial services portfolio, leveraging Mahindra's brand strength and distribution capabilities in rural and semi-urban India.
The joint venture will build upon the existing collaboration between Manulife and Mahindra, which began with the successful launch of Mahindra Manulife Investment Management in 2020. The new venture aims to leverage technology to create an efficient, customer-centric insurer in India.
Following the signing of the agreement, the Manulife and Mahindra teams will collaborate to apply for an insurance license. Debevoise & Plimpton LLP acted as legal counsel to Manulife, while Kotak Investment Banking served as financial advisor and AZB & Partners acted as legal counsel to Mahindra Group.
