Country’s largest bank SBI has signed an agreement with Insurance Australia Group (IAG) to set up 74:26 joint venture for general insurance business. The JV will approach the Insurance Regulatory & Development Authority (IRDA) once it receives other approvals, including the one from the Reserve Bank of India. Currently, there are 14 general insurance companies in India, which includes the four government-owned players accounting for over 60 per cent of the market at the end of March 2008.
The general insurance venture is the latest in a series of tie-ups by SBI, which is already into the life insurance business through SBI Life, a 74:26 JV with Cardiff. Recently, it received the clearance to forge a JV with Societe Generale for the custodial business. In addition, it is eyeing the private equity space and has also entered the pension fund management business, where it has gone solo for the government pension business.
Insurance penetration in India is very low and the general insurance industry is expected to grow at 15-20 per cent annually over 10 years. This initiative will further diversify SBI’s portfolio of financial services offered to its customers.