Engineering major Larsen & Toubro (L&T) is likely to tie up with Zurich-headquartered Swiss Re, a global reinsurer, for a joint venture in health insurance.
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Over the last couple of years, L&T has strengthened its presence in the highly competitive financial services space through acquisitions of asset management companies, and forays into insurance and housing finance.
“Swiss Re will pick up 26% stake in the proposed JV, which will be the international reinsurer’s second attempt to foray into highly attractive Indian insurance market,” a person familiar with the development told Moneycontrol.com.
However, the memorandum of understanding (MoU) for the health insurance partnership is yet to be announced by both the players. Earlier in 2009, Swiss Re’s tie up with Religare, an NBFC, for a similar health insurance JV, was called off.
In response to an e-mail query by Moneycontrol.com, a Swiss Re spokesperson said: “Please understand that, according to our general policy, we cannot comment. Please accept our apology.”
An e-mail sent to L&T however, remained unanswered at the time of writing this article.
“Along with its engineering business, L&T wants to emerge as a key player in the financial services space. However, the matter has not yet gone to the Insurance Regulatory Authority of India (IRDA),” an official from one of the consultant firms said confirming the development.
According to industry sources, health insurance premium in India has been almost growing at 25-30% annually. This segment of insurance market may soon catch up with the motor insurance portfolio, to be the largest contributor to the Rs 65,400 crore (approx) Indian general insurance industry.
Swiss Re’s premium earned and fee income from health and life insurance space went up 4% y-o-y to around Rs 54,970 crore while operating income dropped by 43% to Rs 2,525 crore for year ended December 31, 2011.
L&T Finance Holding , a listed non-banking finance company is also perceived to be a major contender for new private banking license. wherein final guidelines are yet to come up.
