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Pantaloon Forays into Insurance
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Pantaloon Retail establishes a Joint Venture with Italy’s
Generali Group to target the Indian insurance sector.
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On May 23,
2006, Pantaloon Retail (India) Limited (Pantaloon) announced its plans
to form a joint venture (JV) with Italy based Generali Group[1] (Generali)
to tap the insurance sector in India. The venture would be called
‘Future Generali’ and would be headquartered in Mumbai. Generali would
have a 26% stake in the venture. The venture was expected to offer both
life and non-life insurance products.
The proposed JV had yet to receive approval from the Insurance
Regulatory and Development Authority of India[2] (IRDA). It was reported
that Pantaloon would invest Rs 250 million in the JV. The agreement was
signed between the two companies as they saw a lot of potential in the
Indian insurance sector. |
It was reported that the insurance market in India had an
annual growth rate of 16% in life segment and 10% in the non-life segment since
2000. Pantaloon and the Generali group further expected a growth of 15% to 20%
for the next fifteen years in the Indian insurance sector due to the
deregulation of the financial services sector and high savings ratio in India.
Pantaloon’s foray into insurance was part of the group’s diversification
strategy. In March 2006, the Pantaloon Group renamed itself as the ‘Future
Group’. Future Group was divided into six verticals - Future Retail, Future
Capital, Future Brands, Future Space, Future Media and Future Logistics.
Pantaloon would now be under Future Retail.
The Future Group planned to operate its insurance business through its financial
arm, Future Capital, which was involved in asset management. Future Capital also
had plans to get into credit and other consumer related financial services such
as banking, personal finance, and investment services.
Pantaloon planned to leverage its retail strength to acquire customers and
understand their insurance needs. Kishore Biyani, CEO, Future Group said, “We
already cater to the spending Indian customer through our retail, food, and
entertainment business. This is exciting because for the first time we will be
looking at his savings and investment needs too.”[3]
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Continued... |
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[1]
Established in 1831, the Generali Group is a part of the parent company
Assicurazioni Generali. It is a global insurance and financial products
company with strong presence in 40 countries and an asset base of over 300
billion euros.
[2]
The Insurance Regulatory and Development Authority of India (IRDA) was
constituted as a result of the IRDA Act, 1999, with the responsibility to
regulate, promote and ensure orderly growth of the insurance and
re-insurance business in India.
[3]
“Pantaloon set to foray into insurance,” www.timesofindia.indiatimes.com,
May 24, 2006. |
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