Assicurazioni Generali and Pantaloon Retail (India) Limited today signed an agreement for the setting up of a life and non-life joint venture in India. This will mark the entry of the Generali Group, ranked 22nd in the global Fortune 500 in a new market.
The Generali Group CEO Sergio Balbinot, who today signed the agreement with Mr Kishore Biyani, CEO of the Future Group in Mumbai, said: “Emerging countries host 86 percent of the world population, produce 23 percent of wealth, but generate just 12.3 percent of life and 10.4 percent of non-life premiums of the world's insurance industry. In the emerging economies, major growth perspectives are certainly offered by China and India.
In China we have already travelled a long distance while in India we are set to play a very active role in the development of this extremely interesting market.
“I am certain that the vast experience accumulated by our Partner in the retail sector as well as its wide presence across the country together with Generali's solidity and insurance know-how will create a winning mix, with innovative characteristics both in terms of retailing and product policies,” Mr Balbinot added.
Mr Kishore Biyani, CEO of the Future Group (formerly Pantaloon Group) said “ India is a very young country with 60 percent population below 30 years of age. These are the new insurance buyers of India tomorrow who spend a significant time at modern retail outlets (stores and malls).
This year we expect to have more than 100 million customers visiting our stores which number is likely to go up to 180 to 200 million by next year. We are delighted to join hands with Generali who has experience of working with retailers in other parts of the world and expect to cater to the insurance needs of young India.”
Headquartered in Mumbai and named Future Generali, the new joint venture, in compliance with Indian legislation, will be 26% owned by Generali with the remaining 74% owned by Future Group through its retail arm Pantaloon Retail (I) Limited and Pantaloon Industries Limited.
Once it has obtained the required authorisation from the Insurance Regulatory and Development Authority (IRDA), Future Generali, which will have an initial capital of INR 2 billion, will operate in the market through two separate companies in the life and non-life areas.
The Indian Market: Strong growth expectations for the insurance sector (+15/20% p.a. over the next 15 years).
India is a rapidly expanding market as shown by the 8.3% GDP growth in 2005. Currently the country has a population of over one billion, 54% of which is under 25. The middle class consists of approximately 92 million families (around 300 million people) with an annual average income of at least US$ 5,000 per family.
India's very high propensity to save (26% of GDP PIL) is expected to grow even further with the future expansion of the economy.
The Indian insurance market was deregulated in 2000 and currently sees the presence of 14 life and 13 non-life providers. Total premium income in 2005 amounted to approximately € 17.5 billion, 67% of which in the life segment.
The Indian insurance industry has recorded significant growth rates in the past years both the life and non-life segments. In particular, starting 2000 the market recorded an overall annual growth rate of over 16% (18.5% in the life segment and 10% in the non-life). The insurance market is expected to expand at an annual growth rate of 15-20% over the next 15 years.
India's leading retailer Pantaloon Retail (India) Limited is listed in the Mumbai stock exchange where its capitalisation grew from US $ 356 million to US $ 1,218 million at the end of last year.
The company, through multiple retail formats, has over 325,000 sq. m of retail space currently spread over 100 stores and increasing to 1 million sq. m by 2008. The company operates throughout the country with a retail presence across various segments including fashion, food, general merchandise, furniture, consumer electronics, leisure & entertainment, communications, wellness and financial products and services.
Pantaloon Retail (India) Limited is part of the Future Group, which also includes Future Capital, (the financial arm of the Group that is principally involved in asset management), Future Property, Future Logistics, Future Media and Future Brands.
Generali is Europe's third largest insurance group with a premium income of € 62.8 billion in 2005. Its Parent Company is Assicurazioni Generali S.p.A., the leading Italian insurance company, founded in Trieste in 1831.
Characterised from the outset by a strong international outlook and now present in 40 countries, Assicurazioni Generali is a leading operator in Germany, France, Austria, Spain, Switzerland as well as in Israel.
Pantaloon Retail (India) Limited
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