Despite promising prospects in India, major insurance player MetLife is preparing to exit one of its key ventures to focus on mounting challenges on its home turf.
Sources close to the matter reportedly said the insurer is pulling out of India despite new rules that allow foreign companies to own as much as 49% in domestic holdings, up from the previous 26%, according to The Economic Times
The US insurer owns a 26% stake in a local joint venture, which it plans to sell due to its poor performance, said a source close to the matter. The Punjab National Bank is a partner with a 30% share.
A MetLife spokesperson, however, declined to confirm the move. “As a matter of policy, we do not comment on market speculation. India is a high potential market and we are pleased to see how it is developing,” the spokesperson said.
Still, a second source reiterated the possibility of a pullout, the publication states. “MetLife’s senior management visited India recently and they have decided to exit this market owing to the poor performance of the JV,” the source said. “They have hired an investment bank and are reassessing the market.”
But MetLife is showing healthy vital signs in the country. Its Indian interests include assets under management worth Rs 14,158 crore and. It has a solvency margin of 212%. After entering into an agreement with PNB, its market share rose to 4% from 1.5%. It is present in 7,000 locations across the country, as PNB carries its products and services.
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