Kotak Mahindra Bank (KMBL) announced its plan to foray into General Insurance business today at Mumbai. KMBL, today, received approval from Reserve Bank of India (RBI) to form a subsidiary to enter the General Insurance business.
KMBL had earlier received an in-principle approval from Insurance Regulatory and Development Authority (IRDA) for incorporation of a General Insurance company. The company would now be required to apply and complete the registration process with IRDA to act as a General Insurance Company, subject to the provisions of Insurance Act 1938, Companies Act, 2013, regulations notified by IRDA and all other laws prevailing in India.
Gaurang Shah, president, asset management, Insurance and International Business, KMBL, said, ''The General Insurance business in India is currently a Rs 770 billion premium per annum industry and is growing at a healthy rate of 17%. It provides a cover of close to Rs 1,000 lakh crore.''
Shah added, ''With the addition of General Insurance business, Kotak Mahindra group with existing presence across banking, wealth management, life insurance, broking, mutual funds and private equity will be able to offer the complete range of financial products and services to our retail and wholesale customers. Our knowledge and experience across the BFSI spectrum generates excellent cross synergies that we hope to leverage in our General Insurance business to the benefit of our customers and stakeholders alike.''
Mahesh Balasubramanian has been named as chief executive officer of the new venture. Balasubramanian, currently executive vice president and co-head, branch banking, Kotak Mahindra Bank, brings with him over two decades of cross functional experience in financial services. He has spent over a decade with Kotak Mahindra group. He was part of the integral team that helped grow the consumer bank and its branch network.
Balasubramanian added, ''With Kotak Mahindra group's increasing distribution network, growing brand equity and consumer franchise we believe we will be able to leverage synergies and add significant value to the general insurance business. Being a new entrant, we will have opportunities to embrace new technologies and developments in the digital world to provide innovative products and solutions which will deliver superior customer experience.''
Shares of the bank declined Rs 23.85, or 1.99%, to trade at Rs 1,175.75. The total volume of shares traded was 101,623 at the BSE (12.31 p.m., Tuesday).
