Mahindra’s investment in Manulife insurance JV to be funded via Mahindra Finance dividends, says Anish Shah

Anish Shah, Group MD & CEO, Mahindra

Mahindra & Mahindra's investment in the newly announced 50:50 life insurance joint venture with leading Canadian insurer Manulife will be funded through dividend earned from Mahindra Finance, with an annual commitment of Rs 250 crore for the first five years, M&M Group CEO and Managing Director Anish Shah said on November 13 during a briefing to explain the rationale of the deal.

"This investment will be entirely funded by the dividend income we receive from Mahindra Finance,” Shah said during a virtual press conference, adding that the venture marks a strategic extension of Mahindra’s financial services portfolio.

Anish Shah said M&M may apply for an IRDAI licence within 2-3 months, and operations could commence in 15-18 months, subject to approvals. The company may later explore general insurance once composite licensing, a framework allowing insurers to operate across both life and general segments, becomes a reality.

Focus on distribution and protection products

The joint venture will adopt an open architecture model for distribution, implying it will offer products and services from multiple third-party providers, along with a multi-channel approach spanning bancassurance, agency, and digital. “Distribution remains critical for this business,” Shah said, adding that the partnership will leverage Manulife’s proven agency strength while tapping Mahindra Finance’s 1,345-branch network that reaches over 5 lakh villages.

Protection products will be a key focus area. “The protection gap in India is still at 85 percent when measured as sum assured to GDP,” Shah said. “As disposable incomes rise, the need for insurance is becoming greater. Brand and trust are critical success factors in this industry, and Mahindra has both.”

Anish Shah said AI will be a critical pillar for the venture, powering customer acquisition, underwriting, and servicing. “Life insurance falls very much in line with our aspirations for Mahindra Finance, especially as we aim to reach semi-urban and rural India.”

Capital structure and long-term goals

The total capital commitment for the venture is up to Rs 3,600 crore each from Mahindra and Manulife. Shah said this figure may come down given Manulife’s strong reinsurance capabilities, which help optimise capital deployment.

From a profitability standpoint, Shah said the business will breakeven closer to the 10-year horizon, consistent with its long-term approach. “It’s not about 10 years for us; it’s about creating a sustainable business,” he emphasised.

The venture will also benefit from the recent GST cut on insurance premiums. “We’re in this for the long term, and the current momentum in the market is a good place to start,” said Anish Shah.

Mahindra-Manulife partnership history

This is not Mahindra’s first tie-up with Manulife. The two companies first partnered in 2019, when Manulife acquired a 49 percent stake in Mahindra Asset Management Company, later rebranded as Mahindra Manulife Investment Management in 2020. The venture marked Manulife’s entry into India’s asset management space.

Following the announcement on November 13, Mahindra & Mahindra shares were trading around Rs 3,733, down about 0.5 percent from the previous close, while Mahindra Finance rose nearly 0.5 percent to Rs 310.75.