(Reuters) -India’s Mahindra & Mahindra will enter into a life insurance joint venture with Canada’s Manulife, expanding an existing 5-year old partnership, with both companies committing up to $400 million over the next decade.
Each firm will invest $140 million in the first five years, they said on Thursday.
For Manulife, the venture marks its entry into one of the world’s fastest-growing insurance markets, which has posted a compounded annual growth rate of 12% since 2020.
Despite robust industry growth, insurance penetration in the country is still low, especially in rural and semi-urban areas.
Only 2% of life insurance branches are in India’s rural areas, Mahindra said in a presentation to investors.
Mahindra, which has an extensive automotive dealership network and offers retail loans through Mahindra & Mahindra Financial Services, said life insurance was a “logical extension” of its existing services.
The venture builds on the companies’ existing partnership, which began with the launch of Mahindra Manulife Investment Management in 2020.
The companies said they will apply for an insurance licence after the deal is signed.
(Reporting by Ananta Agarwal and Kashish Tandon in Bengaluru; Editing by Mrigank Dhaniwala and Ronojoy Mazumdar)
