Bajaj Finserv confirms Allianz ‘actively considering’ exiting Joint Ventures
The discussions are at preliminary stage and there is no proposal before the Board of the company or its insurance subsidiaries in this regard, according to Bajaj Finserv.
Allianz has indicated that it remains committed to the Indian insurance market but will not speculate on alternatives.
Bajaj Finserv holds a 74% stake in the joint ventures with Allianz.
Allianz, which holds the balance 26% stake, has indicated its strategic priorities have shifted, prompting the potential exit.
According to a Bloomberg report, the latest development is in the wake of a dispute over the direction of the partnership.
Allianz plans to exit Bajaj Allianz Life Insurance Co. and Bajaj Allianz General Insurance Co. because its Indian partner isn’t allowing the German insurer to raise its stakes at a discounted price, the report said.
Further, the report added that Allianz is looking to now buy stakes in newly-established insurance companies to retain a presence in the fast-growing South Asian country.
India’s insurance penetration rate — the ratio of premiums to gross domestic product — is less than half that of countries such as South Africa and Canada, implying strong growth prospects for the sector, according to data from insurance regulator.
The Bajaj Allianz general insurer is the third-largest in India by gross written premiums, while the Bajaj Allianz life insurer is one of the fastest-growing with assets under management of ₹1 lakh crore as of March 31, as per exchange filings.
Following a clarification from Bajaj Finserv, the company’s stock was trading over 2% lower at ₹1,726.15 during today’s afternoon trade.
