ING sells stake in Vysya Life Insurance

AMSTERDAM/MUMBAI Wed Jan 23, 2013 7:02pm IST

People walk in the ING office in Taipei October 20, 2008. REUTERS/Pichi Chuang/Files

People walk in the ING office in Taipei October 20, 2008.

Credit: Reuters/Pichi Chuang/Files

Related Topics

Stocks

   

AMSTERDAM/MUMBAI (Reuters) - Dutch banking and insurance group ING(ING.AS) is to sell its 26 percent stake in Vysya Life Insurance to local partner Exide Industries (EXID.NS), the second foreign insurer to exit a competitive sector in India within a year.

ING said on Wednesday the move was part of the sale of all its Asian insurance and investment management operations. The sale of the stake in ING Vysya Life Insurance was expected to be completed during the first half.

Besides buying ING's 26 percent in ING Vysya, Exide said it would buy 24 percent from two other private Indian investors - Enam Group and Hemendra Kothari Group - for a total of about 5.5 billion rupees.

Exide, which already owns 50 percent of ING Vysya, will "induct a new international life insurance player" after the completion of the acquisition of the remaining 50 percent stake, it said.

ING's exit from the venture comes within a year of New York Life selling its 26 percent stake in a life insurance joint venture with Max India (MAXI.NS) to Japan's MS&AD (8725.T) for about $530 million.

India's insurance business was full of promise when it was thrown open to competition in 2000, but has instead been brought to its knees by losses, regulatory change, uncertainty and a sharp slowdown in economic growth.

A proposal to raise the foreign ownership of insurance firms to 49 percent from 26 percent, key to bring in funds to the loss making sector, has been pending for a long time due to fierce political opposition to the move.

The life insurance industry, which makes up about three-quarters of the Indian insurance sector, has lost a combined $4 billion in the past decade and was battered by a 2010 clampdown on the sale of lucrative equity-linked products.

Nine of the 23 private sector life insurers in India, including units of HSBC (HSBA.L), Italy's Generali (GASI.MI) and Dutch life insurer Aegon (AEGN.AS), lost money in the year ended in March 2012, according to the sector regulator.

ING said on Wednesday the sale of its stake in ING Vysya Life does not affect ING Vysya Bank (VYSA.NS), a listed Indian bank in which it has a 44 percent stake, nor ING's fund management operations in India.

(Reporting by Gilbert Kreijger in AMSTERDAM and Sumeet Chatterjee in MUMBAI; editing by Sara Webb and James Jukwey)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Markets

REUTERS SHOWCASE

Political Pulse

Political Pulse

100 days of Modi: Good for business, not so good for marginalised groups.  Full Article 

Segway in India

Segway in India

Segway’s India business pegs hope on tech-savvy Modi  Full Article 

Best Economy

Best Economy

Swiss economy most competitive once again; EU, U.S., Japan improve.  Full Article 

Power Outage

Power Outage

Mumbai hit by power cuts  Full Article 

Commodities

Commodities

Gold imports, premiums to jump on festive demand - top refiner  Full Article 

Economic Worries

Economic Worries

Pakistan's promises to IMF in doubt as protests sap economy   Full Article 

Islamic Finance

Islamic Finance

Basel III deposit challenge looms over Islamic banks   Full Article 

Antitrust Probes

Antitrust Probes

U.S. business lobby says concerned China antitrust probes unfair.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage