Videocon enters insurance in alliance with Liberty Mutual
04 Nov 2010
Liberty Mutual Holding Co, the Boston-based insurer owned by policyholders, is joining with Videocon Industries Ltd to sell personal and commercial coverage in India.
Liberty Mutual will initially hold a stake of 26-per cent in the venture and has the option to increase its ownership when permitted by Indian law, the insurer said today in a statement. The new company will focus on providing personal auto, health, home and accident insurance.
Liberty Mutual's international operations generated about $7.59 billion of revenue in 2009, a quarter of the firm's total, according to the company's annual report.
The insurer operates in more than 20 nations, including Brazil, China, Chile and India. Videocon is the Indian consumer-electronics maker led by Venugopal Dhoot.
India's growing economy ''means that ever more Indians will be buying insurance to protect their property and possessions,'' Liberty Mutual chief executive officer Edmund Kelly said in the statement. Videocon's ''understanding of the Indian marketplace and how to reach consumers is unparalleled''.
The general insurance company would invest $67 million in the initial phase and will apply for a licence to price its insurance products before the end of the year, said David H Long, president of Liberty Mutual.
The $30-billion group has been looking to re-enter the Indian market and is said to have held discussions with several Indian companies, including Religare and Larsen & Toubro. Earlier, it had tied up with the consumer goods company Dabur, but the partnership didn't fructify.