New York Life has decided to exit the insurance business in India by selling its stake in Max New York Life. Mitsui Sumitomo will buy out New York Life's stake in the company. The company will be run as Max Life Insurance. According Analjit Singh, Founder and Chairman of Max India, the exit by New York Life is a part of its global strategy.
The company will now need approval from the IRDA which is expected to take 4-6 weeks. The money pumped by Mitsui Sumitomo for its stake will make it the second largest FDI in the insurance business.
Max will stand to gain pre tax cash flows of 879 crores, which will be used to to strengthen the Group.
The 26 percent stake by Mitsui Sumitomo is the maximum allowed for foreign ownership in Indian life insurance companies.
The deal would represent a further withdrawal from Asia for New York Life, which recently sold businesses in China, Thailand, South Korea and Hong Kong. GoodReturns.in