Ageas signs agreement to acquire a 40% stake in Indian Non-Life insurer RSGI

Ageas announces that it has signed today an agreement to acquire 40% of the share capital of the Indian Non-Life insurance company Royal Sundaram General Insurance Co. Limited (RSGI) for a total consideration of EUR 186 million^[1].

 

RSGI is a top 10 privately owned player in the Indian general insurance market with strong positions in Motor and Health insurance. The company benefits from extended distribution capabilities with a nationwide network of more than 5,600 agents, 700 branches, and well-established relationships with banks and other distribution partners off- and online. In 2018^[2] RSGI generated EUR 321 million inflows and EUR 10 million net profit and realised between 2015 and 2018, an average annual growth rate of 19% and 55% in inflows and net profit respectively.

The transaction is subject to the approval of regulatory authorities, and is expected to close in the first half of 2019. After completion, Ageas will hold 40% of RSGI's share capital, Sundaram Finance 50% and various other shareholders the remaining 10%.

The acquisition fits Ageas's strategy, as reconfirmed in its recently announced 3-year strategic plan Connect21, to expand its activities in fast growing markets in which it already operates, focussing on Non-Life insurance in particular.

The acquisition will reduce the Group Solvency II by approximately 5%.

This transaction will have no impact on Ageas's share buy-back commitment under its Connect21 strategic plan as announced on 19 September 2018.

Commenting on the agreement, Bart De Smet, CEO of Ageas, said: "Partnering with Sundaram Finance, a well-established company with a vast knowledge of the Indian insurance market, offers us a great opportunity to benefit from the potential of what is one of the world's largest economies with an insurance industry that is expected to grow significantly in the coming years. Being already present in the Indian Life insurance market, we now will be able, through this new joint venture, to also fully grasp opportunities in the Non-Life market. We are confident that Ageas's insurance expertise combined with Sundaram Finance's market knowledge and position will take RSGI to a next level in terms of size and profitability."