DLF exits insurance biz; sells 74% stake

Real estate company DLF on Thursday said that it has signed definitive agreements to sell its 74 per cent equity stake in its life insurance joint venture to Dewan Housing Finance Corporation (DHFL) and its group entities.

The insurance joint venture - DLF Pramerica Life Insurance Company – was between DLF and Prudential International Insurance Holdings, a subsidiary of Prudential Financial Inc (PFI), USA. PFI's assets under management were valued at approximately $1.06 trillion as on March 31, 2013.

The stake sale agreements would be subject to regulatory approvals, the statement added.  Sources valued the deal at about Rs 350 crore. The group CFO of DLF, Ashok Tyagi said: “This transaction is in line with our ongoing strategy to divest non-core businesses/ assets.”

DLF Pramerica Life Insurance Company, which commenced business in September 2008, had a share capital of Rs 320 crore and had earned first premium income of Rs 138.64 crore in 2012-13.

Simultaneously, DHFL announced on Thursday that it has formed a joint venture with Prudential Financial Inc (PFI) to provide life insurance products in India.
The new company will be called DHFL Pramerica Life Insurance Company.

The Chairman and Managing Director of DHFL, Kapil Wadhawan said: “DHFL is thrilled to announce this joint venture with PFI, and we feel very excited to be partnering with an organisation having a deep understanding of the life insurance business, risk management practices and insurance expertise in various international markets.”

He added that the venture will help DHFL extend financial inclusion by broadening the range of products and services available to its customers, especially in Tier 2 and 3 cities/towns, apart from  generating long-term value for DHFL shareholders.”

The Senior Vice-President and International Insurance Group Executive at PFI, Tim Feige said: “We are pleased to join forces with DHFL. Its strong branch network and deep knowledge of the retail financial services market will enable the business to enhance the products and services it provides to existing customers and partners.”