Mahindra Insurance Brokers (MIBL), the subsidiary of Mahindra Finance today signed a strategic partnership with LeapFrog Investments, one of the world's largest investor in insurance to under-served consumers. Under the partnership, LeapFrog's subsidiary Inclusion Resources, Singapore will invest Rs 80.41 crore for a 15% stake in MIBL.
Explaining the rationale behind the deal, Bharat Doshi, Executive Director & Group CFO, Mahindra & Mahindra and chairman of Mahindra Finance said despite substantial growth at rural areas, the markets in rural India is still under-served. "Taking our large network and LeapFrog Investment's experience in countries like Africa and Asia, we believe that we will be able to have a different approach to serve that market," said Doshi.
"The goal of the new partnership would be to introduce new suites of products for people who do not have any access to insurance services. The first product in the offing would be health insurance. A pilot study has already been initiated by the two parties for health insurance,"Andrew Kuper, President and Founder of LeapFrog.
Through this initiative, MIBL aims to be India's leading insurance broker by 2015. Doshi said that this partnership was a step forward for MIBL to grow bigger in the insurance space. Ramesh G Iyer, MD, Mahindra Finance added that since as a non-banking finance company they already knew the cash flow of their customers, the focus now would be to go deeper in their geographical presence using their customer insights. "Our focus through MIBL will now be to offer additional rural products and livelihood products at an affordable price. The key is to make people understand that insurance is a security product and not an investment product," said Iyer.
MIBL is LeapFrog’s second investment in the Indian market in the last twelve months. Last September, the company had invested Rs 67 crore in Shriram Credit. As an impact investment fund, LeapFrog targets both robust financial returns and significant social impact. LeapFrog’s investments currently reach over 8 million people across 6 countries in Africa and Asia.