Aditya Birla Financial Services Group (ABFSG) has signed a memorandum of understanding (MoU) with MMI Holdings Limited, one of the largest insurance-based financial services groups listed on the South Africa Stock Exchange, to enter India's health insurance market.
ABFSG and MMI will enter into a formal joint venture in which the foreign partner will hold a 26 per cent stake – the maximum allowed as per the existing foreign direct investment norms in the sector. MMI has a right to increase its stake to a maximum of 49 per cent should the Indian regulatory environment be amended in the future. “Health insurance as a category has extremely low penetration levels in India. Given our group’s focus on building our retail presence across products, we foresee a huge potential to target the requirements of untapped customers and their families. Our partnership with MMI Holdings Limited will give us the competitive edge given their strong proficiency in the health insurance sector,” said Ajay Srinivasan, chief executive - Financial Services, Aditya Birla Group.
The group’s life insurance company, Birla Sun Life Insurance, is a joint venture with Sun Life Financial Inc, a Canada-based financial services organisation.
Nicolaas Kruger, MMI CEO, said his group considers India as an important strategic market. "ABG is a respected and trusted business group and we are extremely pleased to enter into a partnership with them. We are confident that this relationship between MMI and ABG will lead to the establishment of a successful health insurance business in India," he said.
Formed in December 2010 through merger of Metropolitan Holdings and the Momentum Group, MMI is one of the largest insurers in South Africa, doing business in 12 African countries outside South Africa and the United Kingdom.
