Financial services group MMI Holdings (MMI) has announced that it has entered into a Memorandum of Understanding (MoU) with Aditya Birla Financial Services Group (ABFSG), the financial services arm of India's leading conglomerate Aditya Birla Group (ABG). MMI and ABFSG intend setting up a joint venture, which will enter the health insurance market in India.
The transaction is subject to the execution of the respective legal agreements and obtaining the required regulatory approvals.
This transaction will enable the partners to leverage ABG's strong market presence in India and MMI's established capabilities in health & wellness. The joint venture will offer innovative health insurance products that would not only enhance customer choice but also add a new dimension to the current market offering in India.
Nicolaas Kruger, Group CEO of MMI says, ''MMI considers India as an important strategic market for its international expansion strategy. ABG is a household name in India and a respected and trusted business group and we are extremely pleased to enter into a partnership with them. MMI believes health insurance is a very attractive entry point into India.''
''Health Insurance has low penetration levels in India. Given ABFSG's focus on building a retail presence across products, we foresee a huge potential to target the requirements of untapped customers and their families. Our partnership will give us the competitive edge given MMI's expertise in the health insurance sector,'' says Ajay Srinivasan, chief executive financial services, Aditya Birla Group.
MMI will initially own a 26% stake in the joint venture, being the maximum allowable for a foreign partner in terms of the current Indian foreign direct investment norms. MMI has a right to increase its stake to a maximum of 49% should the Indian regulatory environment be amended in the future.
''We are confident that this relationship between MMI and ABFSG will lead to the establishment of a successful health insurance business in India,'' concludes Kruger.
