AIA to hike stake in Tata AIA Life to 49%

Pan-Asian life insurance company AIA Group has decided to hike its stake in its life insurance joint venture with Tata Sons to 49 per cent.

“AIA will increase its shareholding in Tata AIA Life Insurance Company, a joint venture company formed by Tata Sons and AIA, from the current level of 26 per cent to 49 per cent through the purchase of a 23 per cent stake in the company,” Tata group said in a release.

The completion of the transaction is subject to securing all necessary regulatory and governmental approvals, the group added. Tata AIA Life Insurance Company was licensed to operate in India on February 12, 2001, and started operations on April 1, 2001. The company had recorded total premiums of Rs 2,122 crore, and profits after taxes of Rs 264 crore for the financial year ended March 2015. Foreign partners have become active recently in hiking stake in their Indian ventures after the government eased foreign direct insurance norms for insurance companies. 

Earlier, FDI was only allowed up to 26 per cent, but now the threshold has been increased to 49 per cent. Canadian insurance company Sun Life has announced its decision to hike stake in Birla Sun Life Insurance (BSLI) to 49 per cent from 26 per cent with an investment of Rs 1,664 crore last week. Late November, Japan-based Nippon Life Insurance had also decided to increase stake in  Reliance Life Insurance to 49 per cent from 26 per cent with an investment of RS 2,265 crore.