According to local reports, reinsurer Swiss Re is planning to make a Rs 920 crore (USD 123 million) investment in the Paytm Insuretech Private Limited (PIT) business of Indian financial services firm Paytm, through which it will take a 23% stake in the initiative.
Paytm, which specializes in digital payment systems, e-commerce and finance, plans to leverage its customer base via the insurtech unit to develop new insurance products and solutions.
Swiss Re sees the investment as an opportunity to establish a bigger foothold in the Indian insurance market, which is considered to be significantly under-penetrated compared to the global average.
The reinsurer will invest the Rs 920 crore by way of equity shares and compulsorily convertible preference shares, with Rs 397.3 crore paid up front, and the rest delivered in tranches that remain subject to certain milestones.
“We are excited to partner with Swiss Re for our insurance foray as a key strategic investor. It is an important milestone in our financial services journey of taking general insurance products to the masses,” said Vijay Shekhar Sharma, Chairman, Managing Director and CEO of One 97 Communications, which owns and operates Paytm.
“We look forward to gaining from Swiss Re’s global insurance capabilities and building innovative products to tap into the Indian market.”