Belgium-based Ageas Insurance coverage Worldwide has accomplished the acquisition of a majority stake in its Indian three way partnership Ageas Federal Life Insurance coverage (AFLIC), choosing up 25 per cent stake of IDBI Financial institution for Rs 580 crore.
With this, it has change into the primary international associate within the Indian life insurance coverage sector to personal a majority stake of 74 per cent.
Within the non-life phase, it was Italy’s monetary providers main Generali which raised its stake in Future Generali India Insurance coverage to 74 per cent in Could this yr.
Final fiscal, the Indian authorities allowed international gamers to lift their stakes in Indian three way partnership insurance coverage companies as much as 74 per cent from 49 per cent earlier as a transfer to draw funding in addition to to extend insurance coverage penetration within the nation.
“Ageas completes the acquisition of a majority stake within the Indian life insurance coverage three way partnership Ageas Federal Life,” Ageas stated in a launch.
The worldwide insurer stated it has acquired the extra 25 per cent stake (from IDBI Financial institution) for a complete money consideration of Rs 5.8 billion (EUR 73 million).
“With this transaction, Ageas will increase its curiosity within the three way partnership that it has operated so far along with IDBI Financial institution and Federal Financial institution to 74 per cent.”
Ageas Federal Life Insurance coverage stated with the completion of the bulk shareholding by Ageas, it’s the first life insurer in India during which the international associate has acquired 74 per cent stake.
Home lenders IDBI Financial institution and Federal Financial institution together with Ageas had shaped the life insurance coverage three way partnership named — IDBI Federal Life Insurance coverage Firm –in 2007 and commenced operations a yr later in 2008. Their unique stakes within the firm stood at 25 per cent, 26 per cent and 49 per cent, respectively.
In Could this yr, LIC-controlled IDBI Financial institution had introduced exit from the JV and entered right into a pact with Ageas Insurance coverage Worldwide NV to promote its whole stake of 25 per cent for Rs 580 crore.
Federal Financial institution continues to carry a 26 per cent stake within the three way partnership which was renamed as Ageas Federal Life Insurance coverage in December 2020. IDBI Financial institution exits as a shareholder however stays a distribution associate, stated each the three way partnership companions.
Vighnesh Shahane, MD & CEO, Ageas Federal Life Insurance coverage, stated: “Regardless of the assorted challenges because of the pandemic in addition to the prior uncertainty across the stake sale, we’ve got constantly delivered superior outcomes, achieved new milestones, and declared revenue for ten consecutive years.”
Ageas Federal recorded revenue for ten consecutive years starting FY13. The corporate’s whole premium rose by 13 per cent to Rs 2,207 crore within the fiscal yr ended March 2022. It posted a internet revenue of Rs 94 crore through the yr.
Ageas stated from This fall 2022, AFLIC will enter into the consolidation scope for each IFRS and solvency II.
Below IFRS, this transaction is taken into account a step acquisition, therefore the beforehand held curiosity of 49 per cent is handled as if it had been disposed of and generates a non-cash capital achieve of EUR 50 million, it added.
Worldwide Monetary Reporting Requirements (IFRS) refers to international accounting guidelines. The monetary statements underneath IFRS are constant, clear and simply comparable around the globe.
“The impression of the transaction on the Group’s solvency place is impartial,” Ageas stated additional.
Solvency II is a harmonised, sound and sturdy prudential framework for insurance coverage companies within the EU. It’s based mostly on the danger profile of every particular person insurance coverage firm to be able to promote comparability, transparency and competitiveness.