Exide Industries to acquire ING stake in Indian life insurance joint venture
Dutch banking and insurance group ING has decided to sell its 26% stake in an Indian insurance venture to local partner Exide Industries.
ING is in the process of selling all its Asian insurance and investment management operations. Exide would acquire ING’s 26 % percent in ING Vysya. It would also buy 24% from two other private Indian investors – Enam Group and Hemendra Kothari Group – for a total of about 5.5 billion rupees ($102 million).
Within the period of a year, ING is second company to exit Indian insurance market after New York Life sold its 26% stake in a life insurance joint venture with Max India to Japan’s MS&AD for about $530 million.
Why are these companies making exit from India?
The Indian insurance sector which was quite promising till 2000 is now battered by losses, regulatory change, uncertainty and a acute slowdown in economic growth.
A proposal to increase the foreign investment in insurance firms to 49% from current 26% which is important to attract funds to the loss making sector, has been pending for a long time due to political impasse.
The life insurance industry which holds around three-quarters of the Indian insurance sector has lost a combined $4 billion in the past decade and was jolted by a 2010 crack down on the sale of lucrative equity-linked products.