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TORONTO/MUMBAI - Manulife Financial Corporation (TSX:MFC) and Mahindra & Mahindra Ltd. announced Wednesday they have agreed to establish a 50:50 joint venture in India’s life insurance market, with each company committing up to $400 million in capital investment.
The partnership aims to offer long-term savings and protection solutions to India’s growing population, with a focus on becoming the leading life insurance provider for rural and semi-urban areas while serving urban customers through protection solutions.
According to the companies, each shareholder expects to invest $140 million in the first five years of operations. The joint venture will expand on their existing collaboration, which began with the launch of Mahindra Manulife Investment Management in 2020.
Phil Witherington, President and CEO of Manulife, called the agreement "an important milestone" for entering "one of the world’s fastest growing insurance markets." The expansion comes as Manulife’s stock is trading near its 52-week high, with InvestingPro analysis showing the company has delivered strong returns over the past five years and maintains liquid assets that exceed short-term obligations.
Dr. Anish Shah, Group CEO of Mahindra Group, said the venture would leverage "Mahindra brand strength, deep distribution capabilities in rural and semi-urban India" alongside Manulife’s "global capabilities in insurance products, underwriting and reinsurance."
The companies cited India’s life insurance market growth of 12% CAGR over the past five years, with new business premiums surpassing $20 billion. Despite this growth, India continues to have low insurance penetration, positioning it to potentially become the world’s fastest-growing life insurance market over the next decade.
Following the signing, the companies will work together to apply for an insurance license. The joint venture remains subject to regulatory approval.
The announcement was made in a press release statement from the companies.
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