Generali has completed one of its two missions to India in the insurance field, which foresee its substantial presence in both the Life and Non-Life segments in a rapidly developing country and with forecasts for nominal premium growth of more than 10%.
Today is the turn of the Life business, with the conclusion of the acquisition of the entire stake (approximately 16%) held by Industrial Investment Trust Limited (IITL) in Generali India Life Futures (FGIL)
The other leg of the operation, relating to the Non-Life branchis still being defined, awaiting all the regulatory approvals, and will probably be completed in a few months.
Generali seizes the opportunity of the opening of the Indian market
Generali had announced the operation (in line with Generali's strategy "Lifetime Partner 24: Driving Growth” to strengthen its position in high-growth markets) as early as last January, promptly following up on the opportunity that opened up on the Indian market last year, when the government local had authorized theincrease from 49% to 74% of the quota limit of foreign direct investment in the insurance sector.
The operation relating to the solo Life business which ended today, for a consideration of approximately 26 million, will involve subscribing to a reserved capital increase of approximately 21 million euro relating to FGI shares and at that point Generali will have a stake of approximately 68% in FGIL. The intention is then to reach 71% by the end of 2022 with further reserved capital increases. As of March last year, Future Generali India Life (FGIL) had premiums in its portfolio of approximately 150 million euros.
“The operation is in line with Generali's strategy to strengthen its position in this high-potential market” he commented Jaime Anchústegui Melgarejo, CEO International of Generali "and we are happy to consolidate our presence in India, becoming a Lifetime Partner for an increasing number of Indian customers". It echoes him Rob Leonardi, Regional Officer of Generali Asia who says “We are excited to be able to consolidate our position in the Life segment and we will work to create more value for our customers, agents, partners and distributors”.
A few more months for the Non-Life business
For the Non-Life business – the most succulent package – the operation instead envisages the acquisition by Generali – again from Future Enterprises Limited – of 25% of the shares of Generali India Insurance Futures (FGII) for a consideration of approximately 145 million, thus reaching 74% in FGII, one of the fastest growing non-life insurance companies in the market with 450 million premiums in March 2021.
Following the completion of all components of the transaction, the estimated total impact on the Regulatory Solvency Ratio of the Group will be around -4 pp in 2022.
India is one of fastest growing insurance markets in the world, according to some estimates, with an expected nominal growth rate of premiums exceeding 10% in the period 2022-2030.
“This market has particularly attractive characteristics, thanks to the high growth of real GDP (8% annual growth expected in the period 2021-2022, among the highest of the countries of South-East Asia), the current low levels of insurance penetration ( gross premiums represent only 4,2%3 of Indian GDP in 20203), as well as the growth of disposable income and private consumption (expected to grow by around 7% over the next 5 years)” says Generali.
The Generali share at the end of the morning was 20,08 euros, up 1,77%.
