Swiss insurance company Zurich Insurance has completed a deal worth Rs 5,560 crore ($670 million) with Kotak. Under this deal, Zurich Insurance has acquired 70% stake in Kotak Mahindra General Insurance. Let us tell you that this deal was announced in November 2023.
The first foreign insurance company to do so
With this deal, Zurich has become the first foreign insurance company to enter India. Because, FDI rules were amended to allow foreign ownership from 49% to 74% in 2021. Kotak Mahindra Bank held 100% equity of the paid-up capital of Rs 875 crore in the insurance subsidiary as of March 2024.
In FY 2024, Kotak General’s total premium income from motor insurance was Rs 748 crore and income from health insurance was Rs 620 crore. Tulsi Naidu, CEO (Asia-Pacific), Zurich Insurance Group, said, “The acquisition of Kotak General Insurance paves the way for Zurich to take a leading role in a very important growth market. This is an important strategic step for Zurich. ”
He further added, “India’s insurance market offers immense potential and together with Kotak, we are committed to supporting its growth. We have the global scale, strong expertise in complex risk management bonds, digital capabilities and the ability to bridge the insurance protection gap.” There is technology leadership to bridge the gap. Our aim is to create flexibility among Indian customers.”
Advocacy of tax relief on interest income
SBI Chairman Dinesh Kumar Khara has advocated tax relief on interest income. He said that this will help banks in raising savings. At present, banks have to deduct tax when the interest income from deposits across all bank branches exceeds Rs 40,000 in a year.
In case of savings accounts, interest earned up to Rs 10,000 is exempt from tax. Khara said, if some relief can be given in the budget in terms of tax on interest income, it will be an incentive for depositors. Ultimately, the banking sector uses the deposits raised for capital formation in the country.
