AIA group hikes stake in Tata AIA Life to 49%

Insurance firm AIA Group on Monday announced that it will increase its shareholding in Tata AIA Life Insurance Company to 49 per cent from 26 per cent for an undisclosed amount, joining a number of foreign insurance companies who are increasing their exposure to India since the government hiked the foreign direct investment limit in the insurance sector to 49 per cent.

Tata AIA Life Insurance Company is a joint venture of Tata Sons and AIA Group. It was awarded licence on 12 February 2001 to operate in India and started operations on 1 April of the same year. For the financial year ended March 2015, the company recorded total premiums of Rs2,122 crore and a profit after tax of Rs264 crore.

The Insurance Laws (Amendment) Act, passed in February 2015, allows foreign partners to increase their stake in Indian insurance firms to 49 per cent from 26 per cent earlier. A number of foreign promoters have started increasing their holding in the insurance joint ventures after regulator Insurance Regulatory and Development Authority of India (Irda) clarified the issue of 'management control'.

Last week, Sun Life Financial increased its stake in Birla Sun Life Insurance from 26 per cent to 49 per cent at an investment of Rs1,664 crore. On 1 December, French insurer AXA hiked its stake in life and general insurance joint ventures with Bharti Enterprises from 26 per cent to 49 per cent for an undisclosed amount. In November, Nippon Life bought a 23 per cent stake in Reliance Life Insurance, pushing its holding in the company up to 49 per cent.

Standard Life had in August 2015 announced plans to buy 9 per cent additional stake in its Indian insurance venture HDFC Life, to raise its ownership to 35 per cent, valuing HDFC Life at Rs18,951.4 crore. In the same month, the Foreign Investment Promotion Board (FIPB) approved Tokio Marine's plan to raise stake in its Indian JV partner Edelweiss Tokio Life Insurance to 49 per cent from 26 per cent. British insurer Aviva also announced plan to raise stake in its Indian joint venture with Dabur Invest to 49 per cent.