MUMBAI: German financial giant Allianz SE is in talks with Jio Financial Services (JFSL), the Mukesh Ambani-led firm, for a strategic partnership in India’s life and general insurance sector.
The move comes as Allianz prepares for a fresh entry into the Indian market after ending its 24-year-long joint venture with the Bajaj Group.
New bet on Jio Financial
Allianz recently announced the sale of its 26 per cent stake in Bajaj Allianz General Insurance and Bajaj Allianz Life Insurance to its Indian partner for $2.8 billion, marking its exit from a long-standing alliance. The payout is expected to be staggered over phases.
The German insurer has been in discussions with Reliance Industries (RIL), which owns Jio Financial Services, for several months, with Bloomberg first reporting early talks in October 2024.
Allianz is reportedly seeking a minimum 50 per cent stake in any new insurance venture, along with significant management control.
Neither Allianz nor JFSL has confirmed the negotiations, but an official announcement is expected once the partnership secures regulatory approvals from the Competition Commission of India (CCI) and the Insurance Regulatory and Development Authority of India (IRDAI).
Allianz’s India ambitions
Allianz has long viewed India as a key growth market and intends to reinvest the proceeds from its Bajaj exit into new opportunities in the country.
“India will continue to be one of Allianz’s main growth markets, and Allianz will explore new opportunities to further grow its participation in the Indian insurance market in the future, not only as an investor but also as an operator,” the company reportedly told Business Standard.
Beyond insurance, Allianz has been ramping up its foreign direct investment (FDI) in India, with around $1.5 billion deployed in alternative investments, including equities, debt markets, and infrastructure.
Jio Financial’s insurance push
For Jio Financial, a tie-up with Allianz could fast-track its entry into the life, general, and health insurance segments. During Reliance’s 2023 annual general meeting, Mukesh Ambani hinted at an ambitious digital-first insurance strategy.
Currently, JFSL operates as an insurance broker, offering a direct-to-consumer portfolio of 54 plans across auto, health, and life insurance.
It is also expanding its institutional insurance platform with offerings such as group term life, medical, personal accident, and commercial insurance.
Global context
Allianz has been aggressively pursuing expansion in key global markets after recent setbacks. Its attempt to acquire a majority stake in Singapore’s Income Insurance was blocked by the government, and talks with French asset management firm Amundi to create a ‘European BlackRock’ with euro2.8 trillion in assets were put on hold.
The company is also currently bidding to acquire the Royal Automobile Club of Western Australia.
With India’s insurance market poised for significant growth, an alliance with Jio Financial could provide Allianz a much-needed foothold, while giving JFSL a strong global partner to scale its insurance ambitions.
