The recent spate of deal activity in the insurance sector is being driven less by the increase in foreign direct investment (FDI) limit to 100% from 74%, and more by the enabling provision allowing foreign investors to have management and operational control of these companies, experts said.
Most foreign investment has come from existing players in the Indian market looking to expand their presence, rather than from new investors. This has led to the collapse of several existing partnerships, as foreign investors look for partners offering equal, if not greater, control. Several industry experts Mint spoke to said this could pave the way for more competition and further consolidation in the sector.
Allianz SE, which exited its 26% stake in the insurance and general insurance joint ventures (JVs) with the Bajaj Group in March 2025, returned to the market through a 50:50 JV with Jio Financial Services. Prudential Plc has announced plans to acquire a 75% stake in Bharti AXA Life Insurance, marking a strategic departure from its existing 21% position in ICICI Prudential Life Insurance–which in turn will need to be brought down to 10%.
"The real change is not merely incremental ownership, but the ability for foreign insurers to exercise meaningful management control and run operations independently,” said Shruti Ladwa, partner, EY India.
Under revised rules, at least one among three key positions in an insurance company needs to be held by an Indian resident, compared with earlier when insurers were required to maintain a majority of resident Indian citizens among its directors and Key Management Persons, including at least one among the chairperson, managing director and chief executive officer.
Last month, Liberty Mutual Insurance announced an increase in its stake from 55% to 74% whereas Manulife Financial entered into a life insurance JV with the Mahindra Group in November 2025, extending its asset management partnership to the insurance business.
“While the initial trigger for most conversations is the move to allow 100% FDI, what truly gains traction during deeper strategic discussions is the enhanced control over management and governance,” said Debashish Banerjee, partner, Deloitte India. “This aspect tends to resonate more strongly with both boards and senior management, as it directly impacts decision-making authority and long-term strategic alignment.”
While all options are on the table now, including wholly foreign-owned insurers, foreign institutions are considering their options and still choosing to explore partnerships. “Given the nature of the Indian market, especially the distribution nuances, in many cases, they are returning to brownfield projects through JVs,” Banerjee added.
Dependence on distribution
The appetite for foreign capital, however, is not uniform across the sector. The largest private insurers — already among the most profitable companies in their segment — have limited incentive to cede control to a foreign partner.
As distribution is a challenge, most domestic insurers too rely on bancassurance or bank partnerships to reach their customers. Top players like SBI and HDFC are bank-promoted, giving them the advantage of both capital and distribution.
In the post-earnings media conference on 8 May, State Bank of India chairman C.S. Setty said after BNP Paribas Cardif’s exit in 2021, the bank has no plans to bring in a new partner, either for the life or general insurance business. Earlier, Allianz’s former partner Bajaj Group completely acquired the foreign partner’s stake in the insurance ventures and plans to run them as wholly-owned businesses.
"Life insurance remains heavily dependent on strong domestic distribution, making local partnerships critical. In contrast, non-life and health segments offer greater scope for independent entry.” EY’s Ladwa said, adding that newer non-life players such as Acko General and Go Digit have been able to demonstrate digitally-native distribution.
Small, mid-sized insurers in focus
With larger domestic players reluctant to cede control, foreign interest is then skewed towards mid-sized and newer players, where these investors see opportunities to grow through deep local understanding, customer trust and price sensitivity.
In an April 2026 interview with Mint, Ageas Insurance’s global chief executive officer (CEO) Hans De Cuyper had said that the Group is comfortable with its current partnerships. The Belgium-based insurer holds a 70% stake in the life insurance business with Federal Bank, and 40% in its Royal Sundaram General where Sundaram Finance holds the majority 60% stake.
“If our main distribution partner is also part of the shareholding, that aligns economic interest, governance, strategy. In that sense, I like that model,” he had then said, adding that having a bank partner allowed the insurer to turn profitable in 3-4 years even in a “more volatile” market like India.
In turn, smaller domestic players are keen to bring in long-term foreign investors for capital and global expertise in terms of product innovation and risk management.
“Indian insurers have come to recognize that a good foreign partner brings more than capital - it brings underwriting expertise, technology, and product thinking that can genuinely accelerate growth. On the other side, the move has given foreign players a stronger reason to engage seriously,” said Alok Rungta, managing director and chief executive officer of Generali Central Life Insurance.
Giving foreign players full ownership and greater strategic control is leading to a much more productive environment as some of the recent deals have been “more thoughtful” than earlier, and about finding the right fit structurally and strategically, he said.
Generali Central is a JV between Italy’s Generali Group and Central Bank of India, where the foreign investor holds 74% and is currently not looking to increase its stake since the existing partnership with Central Bank continues to be “valuable from both a strategic and business perspective”, Rungta said. “Generali already holds a majority stake and has significant operational control, enabling it to effectively drive the company’s long-term strategy and growth plans.”