NEW DELHI: German financial giant Allianz SE is in talks with Mukesh Ambani-led Jio Financial Services (JFSL) for a strategic partnership in Indiaโs insurance sector.
This move comes after Allianz announced its exit from Bajaj Allianz General Insurance and Bajaj Allianz Life Insurance.
On Monday, March 17, Allianz confirmed that it would sell its 26% stake in both ventures to its Indian partner, Bajaj Group, for $2.8 billion. The payout may be phased over time.
ALSO READ: Bajaj Housing Finance gains despite uncertainty over MD & CEO Rajeev Jainโs Role
Reports suggest that Allianz has been in discussions with Reliance Industries (RIL), which owns Jio Financial, for several months. Talks intensified after Allianz revealed its plan to exit Bajaj in October 2024.
According to media sources, Allianz is seeking a minimum 50% stake in the new insurance venture. The German insurer is also pushing for a greater say in management and operations.
The company has been keen to reinvest proceeds from the Bajaj exit in new opportunities within India.
Mukesh Ambani had earlier hinted at JFSLโs insurance plans. During Relianceโs 2023 AGM, Ambani said, โJFSL will enter the insurance segment to offer simple, yet smart, life, general and health insurance products through a seamless digital interface, potentially partnering with global players.โ
JFSL currently offers 54 insurance plans across auto, health, and life categories. It is also strengthening its institutional platform in group term life, medical, personal accident, and commercial insurance.
Allianz has steadily increased its presence in India through foreign direct investments (FDI). The company has deployed around $1.5 billion in alternative investments. It is also a major institutional investor in Indian equities, debt markets, and infrastructure projects.
Industry sources say Allianz is keen to partner with a major Indian group, and Reliance fits the bill.
Approval from the Competition Commission of India (CCI) and the Insurance Regulatory and Development Authority of India (Irdai) is awaited before a formal announcement. Allianz must also remove itself as a promoter of Bajaj Allianz ventures before proceeding with the new partnership.
Globally, Allianz has faced recent challenges. Its attempt to acquire Singaporeโs Income Insurance was blocked by the government.
Allianz also paused its negotiations with French asset manager Amundi on forming a โEuropean BlackRock.โ
Allianz is now competing with other bidders to acquire the Royal Automobile Club of Western Australia. Despite these hurdles, the company is determined to expand its presence in India through the potential Jio Financial partnership.
On the stock market, JFSL recently opened at โน221.95 and closed at โน219.50. During the session, it hit a high of โน225.60 and a low of โน220.70. The companyโs market capitalization stands at โน1.43 lakh crore. Over the past year, JFSLโs stock has fluctuated between a 52-week high of โน394.70 and a low of โน198.60.
