Money & Banking

IAG to exit SBI General Insurance; will sell stake to Premji Invest and Warburg Pincus

Our Bureau Mumbai | Updated on October 17, 2019 Published on October 17, 2019

Insurance Australia Group (IAG) is set to exit its joint venture in private sector SBI General Insurance Company, as it looks to focus more on domestic operations.

Two this end, it has entered into a definitive agreement to sell its 26 per cent stake in SBI General Insurance through two transactions. While Premji Invest will buy 16.01 per cent of its stake, Warburg Pincus Group will acquire a 9.99 interest in the private sector general insurer.

“The transactions are subject to regulatory processes and approvals,” it said. IAG, in a separate statement, said it expects the regulatory processes and approvals to be completed during the financial year ending June 30, 2020. “Total consideration amounts to over Australian dollar 640 million, based on the current exchange rate,” it said.

SBI currently holds a 70 per cent stake in the general insurer, which will remain unaffected.

Upon completion of the transaction, Napean Opportunities LLP (an affiliate of Premji Invest) will hold 16.01 per cent stake in SBI General Insurance (SBIG), WP Honey Wheat Investment will hold 9.99 per cent interest, PI Opportunities Fund-1 2.35 per cent stake, and Axis New Opportunities AIF – I 1.65 per cent of the share capital of the company. IAG was looking to exit SBIG for some time, with its focus on the core territories of Australia and New Zealand. Peter Harmer, Managing Director and Chief Executive Officer, IAG, said: “IAG has enjoyed a strong and successful relationship with the State Bank of India since establishing the SBIG joint venture in 2009.”

Dinesh Kumar Khara, Managing Director, SBI, said he welcomed Premji Invest and Warburg Pincus as the incoming shareholders in SBIG.

Earlier this year, Warburg Pincus had bought a 26 per cent stake in a private sector life insurer, India FirstLife Insurance. SBI General Insurance started operations in 2010 as a joint venture between SBI and IAG.

Posts ₹37-crore profit

Meanwhile, SBI General Insurance reported an underwriting profit of ₹37 crore in the first six months of 2019-20. Its gross written premium grew 51 per cent to ₹3,118 crorefrom ₹2,067 crore in the first half of 2018-19.

Published on October 17, 2019
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