Bandhan mulls foray into insurance space

After acquiring a mutual fund business, Bandhan Group is now reportedly planning to enter the insurance space. 

The group first plans entry into the general insurance business, followed by life insurance, CNBC-TV18 reported on Tuesday quoting sources.  It said officials from the group recently met insurance regulator Irdai for the same.  The group is in talks with many general insurance companies for a potential acquisition opportunity, it said.   

After acquiring IDFC AMC through a consortium in April last year, Bandhan Financial Holdings (BFHL) had said it would look at entering the insurance space within the next two years. “We will be looking at both organic and inorganic routes to enter the insurance space. Inorganic route would be comparatively easier to commence a new business,” BFHL managing director Karni S Arha had told reporters. 

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A consortium of BFHL, GIC and ChrysCapital had announced the acquisition of IDFC AMC for `4,500 crore in April 2022. BFHL is the holding company of private sector lender Bandhan Bank. IDFC Mutual Fund this week adopted its new brand identity as Bandhan Mutual Fund. 

Bandhan had earlier shown interests in getting a controlling stake in Reliance Nippon Life Insurance Company, a part of Reliance Capital. Reliance Capital is currently under corporate insolvency resolution process.  

Irdai chairman Debasish Panda last month said there was a need for more insurance companies in the country.  “We need more players, differentiated kinds of players so that they can reach out to every nook and corner of the country. We just cannot be done with a handful of products. We need many more products for wider choices to the consumer,” Panda said while speaking at a session organised by IVCA. 

At present, there are 24 life insurance companies, including LIC, and 32 non-life insurance companies, including standalone private health insurers and specialized insurers. 

Insurance penetration (premium as percent of GDP) in India during 2021-22 was 4.2% compared to 7% globally, while the insurance density (per capita premium) was $91 compared to $874 globally.