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Axis Bank logo next to an ATM machine at its headquarters in Mumbai, India, July 25, 2017. REUTERS/Danish Siddiqui

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• Axis Eyes Insurance Play is an investor in an Indian start-up.
• HDFC Bank has disclosed plans to buy similar shares in Go Digit
• Deal values ​​Digit’s life insurance business at $90 million

MUMBAI (Reuters) – India’s Axis Bank (AXBK.NS) is in talks to buy a stake in Go Digit Life Insurance, two sources with direct knowledge of the matter told Reuters . A rapidly growing insurance market.

Axis plans to acquire a 10% stake in the start-up’s upcoming life insurance business for about $9 million, effectively valuing the business at $90 million, and two a source said.

The move follows India’s largest private sector HDFC Bank (HDBK.NS) to buy a 9.94% stake in Go Digit Life for up to 700 crore rupees ($9 million) in a stock exchange disclosure last week. It was done after stating

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Startup Digit, which is already working in the property and casualty insurance business, is expanding into the life insurance market with a venture called “Go Digit Life”.

A Digit spokeswoman declined to comment, saying the company has not yet obtained a license to operate life insurance. Axis did not respond to a Reuters request for comment.

Digit’s property and casualty insurance business, Go Digit General Insurance, said it was valued at $4 billion and backed by Canadian billionaires Prem Watsa and Sequoia Capital. It offers products such as health insurance, travel insurance and auto insurance.

Axis’ plans underscore growing interest in India’s profitable insurance business from private lenders, one of the sources said, adding that the partnership with Digit will help Axis expand its insurance ambitions. He added that it could help achieve this.

India’s life insurance market, the 10th largest in the world, is still largely untouched. According to data from the insurance regulator of India, life insurance penetration, as measured by life insurance premiums as a percentage of gross domestic product, will rise to 3.2% in the financial year ending 2021, up from 2.15% two decades ago. only slightly increased. .

Axis currently partners with Max Financial to offer several insurance products, but the deal with Digit will give Axis a better understanding of the online insurance industry and better outreach to insurance customers with its own banking offering. could be improved, sources said.

Indian insurance companies are increasingly attracting customers with online services that promise instant issuance of policies and ease of claims. Selling insurance through traditional agents is still popular in India, especially in small towns.

Go Digit General Insurance recently filed documents to raise at least $440 million through an initial public offering, targeting a $5 billion valuation. Its founder, Kamesh Goyal, is an industry veteran, formerly of Germany where he led Allianz’s India joint venture.read more

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Reported by M. Sriram. Edited by Aditya Kalra and Ana Nicolaci da Costa

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