News: IDBI, Federal Bank, Fortis sign JV for insurance biz

(PTI 23/11/2006) Mumbai - In a significant deal, IDBI Bank, Federal Bank and Fortis have entered into a joint venture to establish a new life insurance company.

The new company would have the majority share of 48 per cent to be held by IDBI, while Federal Bank and Fortis Insurance International will own 26 per cent equity stake each.

The JV, incorporated following a MoU signed by the parties on July 11, 2006, would offer a full range of life insurance and long-term savings products to the Indian market, a release here stated.

The new company is likely to become operational by around mid-2007 subject to regulatory approvals.

Among the various products, the company would offer traditional and unit-linked savings plans, protection, health and disability covers, available on an individual and group basis. The products would be promoted through various distribution platforms including bancassurance, agency and direct sales.

However, in view of Fortis' global experience in bancassurance and the strengths of the bank partners, the company will see bancassurance as a key distribution strategy.

Commenting on the venture, IDBI Chairman and Managing Director V P Shetty said life insurance is a high growth business in India.

"We are excited about creating value for customers by leveraging our brand value, capital strength and the track record of innovation in retail banking," he said.

The global expertise of Fortis and the substantial regional franchise of Federal Bank add great strength to the partnership and we are very pleased to have been able to build a fruitful relationship with them, he added.

Federal Bank Chairman M Venugopalan termed it as a landmark event in efforts to diversity into complementary areas.

Fortis Insurance CEO Peer Van Harten said that the JV is an important step for Fortis in terms of having a leading presence in Asia and we are very excited about being involved in the Indian life insurance market which has huge potential.