Auto major Mahindra & Mahindra (M&M) has forayed into the life insurance business with the signing of an agreement with Canada’s Manulife to set up a 50:50 joint venture (JV). The total capital commitment for the venture, which is subject to regulatory approvals, is pegged at Rs 7,200 crore ($800 million) with each partner contributing Rs 3,600 crore. The JV’s valuation is projected to hit Rs 30,000 crore over the next 10 years.
Manulife is a leading Canadian life insurer and asset manager with $1.1 trillion assets under management and 36 million customers. It is already a partner in M&M’s mutual fund business, Mahindra Manulife Investment Management, which was launched in 2020.
Anish Shah, Group CEO & managing director, Mahindra Group, said life insurance is a logical extension to achieve the group’s goal of building a comprehensive financial services portfolio by leveraging the Mahindra brand, along with its strong distribution network in rural and semi-urban India.
“We expect to apply for the licence in about two to three months. And realistically it will take 15-18 months for the joint venture to start operations,” Shah said at a media briefing. M&M Group chairman Anand Mahindra called it a ‘a long overdue entrance into life insurance’ in a post on X.
“We will work hard to provide greater security to all our customers and strong returns to our investors,” he stated.
The joint venture will begin with an initial investment of Rs 1,250 crore ($140 million) over the first five years, eventually reaching the full commitment of Rs 3,600 crore over a decade.
“This will be funded by the dividend that M&M earns from Mahindra Finance. Only one-third of dividend earned from Mahindra Finance is required for funding the JV in the first five years,” Shah added. He said the life insurance company will be housed under M&M and not under its NBFC subsidiary Mahindra Finance, citing regulatory and other considerations.
M&M said the JV’s vision is to become the leading life insurance company for rural and semi-urban India, while also serving urban customers through protection-led offerings. The entity aims to offer long-term savings and protection products.
Mahindra Finance currently operates 1,345 branches with a deep rural and semi-urban presence across 500,000 villages and over 8,000 towns. According to Shah, the life insurance company will leverage this extensive network alongside potential Bancassurance partnerships. “We will also look at agency channels because it’s an area where Manulife is very strong,” he said.
The group’s financial services portfolio also includes Mahindra Finance and Mahindra Insurance Brokers, which is expected to play a key role in the JV’s distribution strategy. On the possibility of entering the general insurance business, Shah said it would be a natural extension given M&M’s auto business. “If the insurance regulations allow a composite licence, that could be a potential upside for the JV,” he said. “And that’s something we will evaluate when that happens but yes, the general (insurance) is attractive as well.”
According to Shah, the break-even period for a life insurance business is typically 10-12 years and the new venture is expected to reach a valuation of Rs 30,000 crore over that period. India’s life insurance market has crossed $20 billion in new business premiums, growing at a 12% CAGR over the past five years. Despite this growth, the country continues to face a significant protection gap and low insurance penetration, presenting long-term growth opportunities.
The entry comes as India’s life insurance sector is projected to grow at a CAGR of 10.5% over the next decade—more than double the global average of 5%. According to the latest Allianz Global Insurance report, India is set to overtake Japan to become the second-largest life insurance market in Asia, after China.
The move also highlights rising competition in the domestic life insurance space. In July, Jio Financial Services and Allianz Group announced a 50:50 reinsurance joint venture and signed a non-binding agreement to form equally owned general and life insurance ventures in India. Domestic brokerage Angel One has also announced plans to invest at least Rs 400 crore in a life insurance JV with Singapore’s LivWell Holding Company. Shares of M&M were trading flat at Rs 3,736.80 on the NSE at the time of the announcement but ended nearly 1.5% lower at Rs 3,699.40.
