Swiss Re and Zurich Insurance Group could ramp up their business on the Indian subcontinent as both have been approached to buy a 26% stake in SBI General Insurance.
The stake in SBI General Insurance has been proffered not only to the Swiss companies but also to private equity firms and state funds according to a report by Economic Times of India.
Canada Pension Plan Investment Board (CPPIB), sovereign wealth funds such as Abu Dhabi Investment Authority (ADIA) and Temasek as well as existing investors like PremjiInvest have also been approached to buy out the stake owned by Insurance Australia Group (IAG), as the company looks to exit its nineyear-old Indian joint venture as part of a larger global realignment.
The biggest Australian general insurer is restructuring its Asia-Pacific operations and has already exited Indonesia, Thailand and Vietnam, sources told the Indian news outlet. India and Malaysia are next on the agenda.
A number of factors, including recent regulatory changes, geography, economic growth and exposure to natural catastrophes have positioned India to become a global reinsurance hub, according to the International Regulatory and Development Authority of India (IRDAI).
IRDAI noted in its annual report that India currently has very low levels of insurance penetration but high vulnerability to natural catastrophes, leaving ample scope for its re/insurance industry to expand "aggressively and inclusively."