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Press Releases

Strategic Capital Alliance with Major Life Insurance Company in India

April 12, 2012

Mitsui Sumitomo Insurance Co., Ltd.

Mitsui Sumitomo Insurance Co., Ltd. (President: Yasuyoshi Karasawa) has agreed to acquire 26% of the outstanding shares of Max New York Life Insurance Company Limited, a life insurance company which has Max India Group (Parent company Max India Limited, listed on the Bombay Stock Exchange) as its majority shareholder, a leading Indian corporate group, for 27.3 billion rupees (approx. 45 billion yen). Mitsui Sumitomo Insurance Co., Ltd. will invest and participate in the management of Max New York Life Insurance based on the assumption that approval will be obtained from the Indian insurance supervisory authorities. After the investment, the insurance company’s name will be changed to “Max Life Insurance Company”.

This investment marks the fifth country the Company’s overseas insurance business has entered in the Asian life insurance market. The Company will achieve sustained growth going forward by expanding its operating base in rapidly growing Asian markets.

1.Overview of the Capital Alliance

The Company will acquire the 26% of the outstanding shares of Max New York Life Insurance Company Limited (unlisted) held by US-based New York Life based on the assumption that approval will be obtained from the Indian insurance supervisory authorities. This ownership is the maximum level allowed for foreign investment in Indian life insurance companies. Upon making the investment, the Company will also dispatch officers and employees to the firm (two of whom are scheduled to be appointed as directors) to actively participate in the company’s management. The Company will also provide a variety of expertise in the life insurance business, accumulated inside and outside Japan, in an effort to meet the life insurance and annuity insurance needs of multinational corporations entering India, along with the sale of life insurance products to the wealthy, who make up the company’s existing clientele.

2.Background and Aim of the Capital Alliance

  1. (1) Entry into the Indian Life Insurance Market
    With approximately 1.2 billion people making it the world’s second most populous country, India’s economy is continuing to grow at a remarkable pace, with real GDP growth around 8%. Furthermore, the dramatic increase in a middle class with abundant need for life insurance has resulted in rapid growth in the life insurance market, at an average of 24% per annum over the past decade. Meanwhile, given a life insurance penetration rate (the ratio of life insurance premium revenue in relation to GDP) of only 4.4% in fiscal 2010, hovering around half the level seen in Japan, and considering the country's heavily youthful demographic composition, the life insurance market is expected to continue to grow in the future. In this environment, the Company reached agreement on this alliance after careful consideration of how it could most effectively enter the Indian life insurance market.
  2. (2) Expansion of the Asian Life Insurance Business
    The Company’s investment in foreign business is focused on rapidly growing Asian markets, and as a result, it has one of the greatest presences among foreign non-life insurance companies in the Asian non-life insurance industry. In the life insurance industry, the Company has invested in leading local companies in Thailand, China, Malaysia and Indonesia to enter the markets in these countries, and this capital alliance will heighten our presence in the Asian life insurance industry.

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