The insurance regulator IRDAI has granted the final approval to the new general insurance company Go Digit General Insurance floated by India-born Prem Watsa, who controls Fairfax Financial Holding, the parent of Lombard.
The new insurer will be headquartered in Bengaluru and is expected to use a digital platform to conduct general insurance business, reported the Indian Express.
The new company has already created a buzz in the market because Mr Kamesh Goyal, a former senior executive of Allianz, is also a major partner in the new insurance company. Some of the Mr Goyal’s earlier colleagues are also partners in the company.
The approval was granted just a day after the close of the INR56-billion (US$862 million) initial public offer (IPO) of ICICI Lombard General Insurance. The partners of the nonlife insurer, ICICI Bank and Watsa-owned Fairfax, offloaded stakes of 7% and 12% respectively.
Post IPO, Fairfax's stake (through Lombard) will fall to 9.9%. IRDAI wanted Fairfax to reduce its stake in ICICI Lombard below 10% to pave the way for granting the licence to the new company. Fairfax will hold a stake of 49% in Go Digit.
Under Indian regulations, foreign investors cannot own a stake of more than 10% each in two or more insurance companies.