XL Group has expanded its Indian market presence with the acquisition of a minority 20% stake in Indian re/insurance broker, Mahindra Insurance Brokers (MIBL), a subsidiary of Mahindra & Mahindra Financial Services (M&M).
The acquisition values the broker at about $200 million.
XL is to buy 15% of the equity stake from existing shareholder LeapFrog Financial Inclusion Fund, and 5% directly from Mahindra Finance for a total consideration of $40 million, subject to regulatory approvals.
“This minority investment plays to our commitment to emerging markets and to supporting insurance penetration in developing economies,” said Greg Hendrick, president, P&C insurance and reinsurance, XL Catlin.
XL Group will buy into the insurance brokerage through its subsidiaries.
In April, XL Catlin opened its first fully licensed reinsurance branch office in Mumbai, to take advantage of what Mike McGavick, Chief Executive Officer (CEO) of XL Catlin, called a “huge opportunity” for reinsurance companies who understand the local market and have a global track record in delivery.
Now, Hendrick says the 20% MIBL acquisition will build on this expansion, providing XL with “a chance to better understand the primary retail insurance and distribution landscapes in the rapidly developing Indian market.”
Since 2004 XL Catlin has had service operations in India which offer a range of business support services in areas such as underwriting, actuarial, claims, finance and marketing.