PNB to buy 30% stake in MetLife Insurance

 

 

GOVERNMENT-RUN Punjab National Bank (PNB) will pick up 30 per cent stake in MetLife Insurance Company for an undisclosed sum. PNB had been scouting for a partner for a long time for exposure in the insurance sector.

Following close of the transaction, the insurance company will re-brand itself as PNB MetLife to leverage strengths of the two brands in the Indian market.

PNB has also agreed to enter into 10-year distribution tie-up with MetLife India. At present, PNB is one of the bancassurance partners of Life Insurance Corporation of India (LIC).

When the MetLife deal is finalised, PNB will have to break its distribution tie with LIC to fall in line with regulatory norms.

PNB had short-listed 10 companies in March 2011 and narrowed the list to three firms, Aviva Life, MetLife and Bharti Axa Life.

KR Kamath, CMD of PNB, said, "We have considered offers made by various companies and selected MetLife as our partner.

With 60 per cent branches in rural and semi­urban areas, PNB is positioned to take insurance to deep pockets of India. This partnership has the potential to drive the company into the top tier of Indian life insurers and more than double its market share."

William J Toppeta, president-international of MetLife, said, "Given its global significance, India is a strategic focus market. We have identified 10 strategic markets around the world and on top of that list is India. Addition of a financial institution like PNB as a shareholder and partner will enhance MetLife India's ability to move into the top tier of life companies here."

 

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