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Insurance Australia Group Ltd (IAG) Agrees to Sell 26% SBI Insurance Arm Stake

Updated On Jan 31, 2020

Australian General Insurer, Insurance Australia Group (IAG) said on Thursday that it has agreed to sell its complete 26% stake in SBI General Insurance (SBIG) to Warburg Pincus and Premji Invest. 

While Premji Invest will buy 16% in the general insurer, Warburg Pincus has agreed to acquire the rest 10%. The transaction is expected to complete by 30th June 2020, and are subject to regulatory processes and approvals. 

Peter Harmer, the Managing Director and Chief Executive Officer of IAG shares, “With our sharpened focus on our core territories of Australia and New Zealand, now is the right time for IAG to exit its investment in SBIG. IAG has enjoyed a strong and successful relationship with State Bank of India since establishing the SBIG joint venture in 2009.”

SBI General is a joint venture between State Bank of India and Australia's Insurance Australia Group. SBI and IAG own 70% and 26% stake in the general insurer. After the agreement, SBI will keep owning 70% in the general insurer arm. 16.01% will be acquired by Napean Opportunities LIp, and 9.99% will be purchased by an investment vehicle of Warburg Pincus, WP Honey Wheat Investment Ltd. In addition to this, PI Opportunities will acquire 1.65% stake. 

The Managing Director of global banking and subsidiaries at SBI-Dinesh Khara shares, “SBIG has a high-quality management team having an institutional framework with systems and processes in place. This is demonstrated through consistent high growth and positive underwriting results. We extend our heartfelt appreciation to IAG, the outgoing partner, who has progressively collaborated with us in building SBIG to the level where it stands today”.

The Chairman of SBI, Rajnish Kumar stated that the bank has decided not to take the general insurance part public, as there is no immediate requirement of additional capital.   

SBI General Insurance offers a huge variety of products ranging from Personal Accident, Health, Motor, Home, and Travel Insurance to its valuable retail customers. The insurer also offers Liability, Marine, Aviation, Cyber Defence, and Fire insurance policies in the commercial space. The insurer offers these insurance products at affordable prices to make them accessible to all the individuals as well as businesses. Present in over 110 cities throughout the country, SBI General Insurance had 3.24% of market share till September, as among general and stand-alone health insurance providers.   

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