IDBI, Federal Bank and Fortis in life insurance joint venture

13 July 2006

Mumbai: IDBI, Federal Bank and Europe's €35-billion banking and insurance conglomerate Fortis have signed a memorandum of understanding (MoU) for setting up a life insurance company in India.

IDBI and Fortis were looking for a third partner for their life insurance business in India and have jointly identified Federal Bank for it. IDBI will initially own 48 per cent in the proposed life insurance venture while Fortis and Federal Bank will hold 26 per cent each.

"We are very glad to enter into a joint venture with IDBI and Fortis to start a life insurance company. Federal Bank, with a spread and reach to every nook and corner of Kerala and to all major urban /metro centers of the country, has a wide distribution network and a vast customer base. Our aim is to convert ourselves into a financial super market with an array of financial products on our shelves for our customers to choose from, in addition to our present banking products and services. The new joint venture will enable us to offer a wide range of insurance products to our customers and to extend our customer base. The synergy between IDBI Bank and Federal Bank - the two Indian Banks - and Fortis with its vast expertise in the insurance business is expected to enrich the Indian insurance market," said M Venugopal, chairman of Federal Bank.

For IDBI, a foray into the life insurance business will complement the range of financial products and services being offered to its clientele and is consonant with its vision statement of being a financial conglomerate, said chairman V P Shetty.

Federal Bank is one of the successful private sector banks having a good retail distribution reach and loyal customer base in India and abroad and will complement IDBI's growing distribution network, he said.

Fortis, one of the largest players in the insurance business in Europe and has successful joint ventures in various Asian countries.