Magma inks JV with German Insurer HDI Gerling, to enter General Insurance Business

Magma Fincorp Limited and its Promoters signed a Joint Venture agreement with HDI-Gerling International Holding AG, Germany on 28 July 2009 at Kolkata to enter into the general insurance sector in India. HDI-Gerling International is part of the Talanx-Group, 3rd biggest insurance Group in Germany. The Joint Venture headquartered at Kolkata, will leverage on the strengths of the two companies to offer general insurance products through the existing strong distribution and service network of Magma with deep penetration in rural India. The agreement was signed at a meeting held in Kolkata by Mr Sanjay Chamria, Vice Chairman & MD of Magma Fincorp and Dr. Christian Hinsch, Chief Executive Officer, HDI-Gerling and member of the Board of Management of Talanx.

Addressing the media Mr Sanjay Chamria, Vice Chairman & MD, Magma Fincorp said, the new venture would be leveraging the strengths of both the companies to offer customized services to customers in India. Magma has a strong network of 153 offices across the country with strong focus on the rural and semi-urban markets. 77% of Magma's branches and 63% of its customers are in the rural and semi-rural areas, which are generally underserved markets for insurance products, he added. The Company has served an important role in financial inclusion in these markets with more than 50% of the customers of Magma having availed their first time loan from the Company. "The new entity will be the first private sector general insurance company to be headquartered in the east zone" he added.

Dr. Christian Hinsch, Chief Executive Officer, HDI-Gerling, elaborating the role the company has been playing in Europe and Latin America, said through the joint venture HDI-Gerling would bring along its unique product design and cost efficient operational management skills apart from offering an excellent reinsurance platform which would help manage insurance risks appropriately. HDI-Gerling has primary insurance operations in over 25 countries, with a particular focus on emerging markets like Brazil, Chile, Mexico, Poland, Turkey, Bulgaria, Slovakia and Ukraine. He also said, the joint venture in India with Magma is part of HDI- Gerling's and Talanx's global expansion plans. "The product expertise and emerging market experience of HDI-Gerling is expected to complement the trust and confidence that Magma enjoys with its customers and is expected to enable introduction of insurance products to this segment of India" he added.