The 26 percent share in the company was expected to sell and has finally gone to another insurer.
ING, the Dutch banking group, has sold its 26 percent share of Vysysa Life Insurance to another insurer in the Asian marketplace, Exide Industries, a local company.
This makes ING the second foreign business to step out of India within the last year.
This is a notable occurrence as the life insurance sector within India is considered to be competitive. ING made the initial announcement on Wednesday, stating that this decision to sell was one element of its overall plan to sell all of its insurance and investment operations in Asia. The stake in Vysya was already expected to take place within the first half of this year.
Aside from the stake in the life insurance business, Exide will also be taking on more of Vysya
According to Exide’s announcement, beyond the 26 percent stake of the life insurance company that it purchased from ING, it will also be buying another 24 percent of Vysya from two other private investors in India, including Hemendra Kothari Group and Enam Group. The total purchase price is estimated at 5.5 billion rupees.
Exide currently owns half of ING Vysya. It has stated that it intends to “induct a new international life insurance player,” following the completion of the purchase of the 50 percent stake that is remaining.
By stepping out of this venture, ING has become the second foreign life insurance company to exit the Indian market. The first was New York Life, which sold its 26 percent stake in a joint venture it had with Max India. That sale went to MS&AD from Japan for approximately $530 million.
The life insurance business in India was leapt into when it opened itself to competition in 2000, but since that time, insurers have experienced regulatory changes, losses, a slowdown in economic growth, and considerable uncertainty that have made the market less exciting to foreign companies.
The country currently faces a long time pending proposal for foreign firms to be able to own a larger stake in life insurance companies. The current cap is at 26 percent, but the proposal – which has yet to see any movements due to fierce political opposition – would bring it to 49 percent.