Shares of Mahindra & Mahindra Ltd (M&M) are trading flat after hitting a day’s high of Rs 3,754.10 on 13th November. This follows the company’s announcement of an agreement with Manulife to form a 50:50 life insurance joint venture (JV).

The JV, subject to regulatory approval, aims to become the leading life insurer for rural and semi-urban India. It also plans to serve urban customers with strong protection products. Once approved, it will build on the existing partnership between Mahindra and Manulife, which already runs Mahindra Manulife Investment Management. This was launched in 2020.

Both partners will commit up to Rs 3,600 crore ($400 million) over 10 years. They plan to invest up to Rs 1,250 crore each in the first five years. The venture will focus on offering long-term savings and protection solutions aligned with India’s “Insurance for All by 2047” vision. It will combine Mahindra’s strong rural reach with Manulife’s expertise in urban insurance markets.

India’s life insurance industry, now worth over $20 billion in new business premiums, has grown at a 12% CAGR over the past five years. However, M&M noted that low penetration and a high protection gap leave significant room for growth. This makes India one of the fastest-growing life insurance markets for the coming decade.

The new JV will be set up as a public limited company. Both Mahindra and Manulife will nominate two directors each to its board. Mahindra will retain the right to restrict any changes in the JV’s capital structure unless mutually agreed upon.

M&M Group CEO and MD Anish Shah said the JV will leverage technology. It aims to create a customer-centric, efficient insurer that adds long-term value for shareholders.

The move adds to rising competition in India’s insurance space. Earlier in July, Jio Financial Services and Allianz Group also announced a 50:50 reinsurance JV. They have plans for new ventures in general and life insurance.

At 1:09 PM, shares of Mahindra & Mahindra Ltd were trading 0.62% lower at Rs 3,731.20 on NSE.

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