Mitsui Sumitomo scouting for life insurance partner in India

German insurer Ergo is another player looking for a partner.

Japanese insurance giant Mitsui Sumitomo Insurance Group (MSIG) is planning to enter the life insurance space in India.

Sources said MSIG, which is unrelated to Sumitomo Mitsui Banking Group which recently picked up a 4.5 per cent stake in Kotak Mahindra Bank, is actively scouting for a partner and may finalise one in another six months. An email sent to Mitsui Sumitomo on Thursday evening remained unanswered.

According to the current regulations, a foreign partner can take up to 26 per cent stake in one insurance company while the rest remains with the domestic partners.

The Japanese insurer is already present in the non-life insurance space, with Cholamandalam MS general insurance — a joint venture with Murugappa Group and is on a lookout for a life partner.

Mitsui Sumitomo is the holding company of life, non-life and financial services including asset management company and venture capital fund. Headquartered in Tokyo, the company was formed in 2001 from the merger of Mitsui Marine & Fire Insurance and Sumitomo Marine & Fire Insurance.

Japan-based Tokio Marine Holdings is another firm entering the life insurance space. It has formed a joint venture with financial services company Edelweiss Capital. The company is yet to get all regulatory licenses.

German insurer- Ergo is another player looking for a partner. Foreign investors are keen on tying up with public sector banks. Punjab National Bank, Allahabad Bank, Syndicate Bank, Central Bank of India and Vijaya Bank are a few banks left without a life insurance venture. These banks are selling products of existing companies as corporate agents.

Moreover, government-owned banks are not allowed to acquire more than 51 per cent stake in an insurance company. The bank partnership has to be a three-way joint venture.

Axis Bank, the third largest private one, has recently picked up a five per cent stake in Max New York Life for a strategic bancassurance 10-year partnership.

Nippon Life and a Malaysian insurance company are also said to be keen on entering the Indian market.