Mahindra Finance Ventures into Insurance Services with IRDAI Approval

On May 22, 2024, Mahindra & Mahindra Financial Services Limited (Mahindra Finance) informed the stock exchanges that the company had received a Certificate of Registration from the Insurance Regulatory and Development Authority of India (IRDAI) to act as a ‘Corporate Agent (Composite)’ under the Insurance Act, 1938. This licence will enable Mahindra Finance to provide customised insurance plans to its customer base, improving its customer-centric approach.

The corporate agency licence would expand Mahindra Finance’s product offerings by including insurance solutions. It would help customers fulfil financial and insurance requirements through a single company. The process would expand the company’s existing revenue and profit sources by utilising its current branch network and field personnel.

Mahindra Finance’s entry into the Corporate Agency business is accompanied by a strong compliance framework, which includes procedures, policies and internal controls to assure adherence to regulatory requirements mandated by IRDAI.

The critical aspect of this business model would be operational efficiency and association with Insurtechs. Mahindra Finance aims to stand out through technology innovation, focusing on automating processes like quote generation, policy management, and claims support in partnership with Insurtechs. This strategy aims to reduce manual efforts and enhance overall efficiency.

The corporate agency licence will allow Mahindra Finance to solicit, procure, and carry on the business of selling, distributing, advertising, and marketing all kinds of insurance products or services on behalf of multiple Insurance companies as a corporate agent, as permitted by IRDAI. These products/services include health, life, and general insurance.

The company stated that insurance penetration in rural and semi-urban parts of India is very low compared to metro and tier-1 cities. Mahindra Finance plans to provide sales staff with adequate training and certification to empower them to pitch and sell individual health, life and motor insurance policies.

Commenting on this milestone, the Managing Director and CEO of Mahindra Finance, Raul Rebello, said, “The corporate agency licence is a significant moment for us in our journey to empower customers with the best products and services alike. This diversification will open new revenue models for us while delivering personalised services to customers across Mahindra Finance’s 1360+ branches, thereby enhancing their experience. By expanding our capabilities and offerings, we aim to promote innovation, benefitting our customers and stakeholders in our journey of being a preferred financier to emerging India.”

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.