Some of the City’s biggest insurers will this week outline their commitment to participating in India’s growth story by reaffirming expansion plans during a UK visit by the head of one of Asia’s largest economies.
Sky News understands that Aviva, Bupa, Lloyd’s of London, Standard Life and Willis will confirm collective plans to plough hundreds of millions of pounds more into Indian joint ventures and partnerships.
Their commitment will be among a number of business and trade deals announced during Narendra Modi’s trip to Britain, and will be hailed by British ministers as evidence of strengthening trade ties with India.
The insurers’ pledges – some of which will be repackaged statements of previously announced moves – will nevertheless be important because they will be interpreted as a sign of how one of Asia’s most closed economies is gradually being liberalised.
Until recently, foreign insurers were allowed to own no more than 26% of an Indian venture, but that ceiling has now been raised to 49% following an intervention by Mr Modi aimed at creating a more business-friendly environment.
Sources said that Bupa was on the verge of applying to regulators to increase its stake in Max Bupa, which sells health insurance, from 26% to 49%.
If successful, the additional investment would cost in the region of £25m, they added.
An insurance insider said that as well as the expanded equity investments, the passage of Indian legislation would enable Lloyd’s of London to establish a major presence in the country and provide local access to the insurance market’s specialist reinsurance services.
“A Lloyd’s presence in India, alongside increased investment by UK insurers, can support the ongoing development of the Indian insurance and reinsurance sectors, which are key elements in promoting sustainable economic growth,” a Government source said on Tuesday.
A Standard Life spokesman said:
“We recently had approval from the Competition Commission of India however, the conclusion of the transaction is also subject to regulatory approvals from The Foreign Investment Promotion Board and Insurance Regulatory and Development Authority of India.”
Aviva’s India chief executive, Trevor Bull, said in August that the country represented a “huge opportunity” for insurers.
“With insurance penetration being a little over 3%, India presents a huge opportunity for insurers to help more people.”
A Bupa spokesman confirmed that its Indian joint venture would “shortly submit a formal joint application to the IRDA and FIPB for approval for Bupa to increase its investment in Max Bupa”.
“Should this application receive regulatory approval, it will bring Bupa’s total investment into the Indian health insurance sector to over £55m.”
Separately, Sky News understands that some of the UK’s leading business figures have signed a letter co-ordinated by the investment agency London First urging ministers to remove students from net migration statistics.
The letter, which will be published in a national newspaper on Tuesday, has been timed to coincide with Mr Modi’s visit, following controversy about the numbers of Indian students who have been able to study in the UK.
Curated from Indian PM Visit Sparks Insurance Deal Bonanza