Zurich Insurance Group has agreed to acquire a 51% stake in Kotak Mahindra General Insurance Company from India’s Kotak Mahindra Bank, in a cash and share deal worth $488m (SFr441.34m).

The Swiss insurer added that it will also acquire an additional stake of up to 19% in Kotak Mahindra General Insurance within three years from its initial acquisition.

The deal forms part of Zurich’s efforts to enter the Indian insurance market and create a “leading non-life insurance franchise”.

It also represents the largest investment by a foreign insurer in an India-based non-life insurance company.

Kotak Mahindra Bank managing director and CEO Dipak Gupta said: “The combined expertise and resources of respective firms will enable us to provide innovative solutions to meet the evolving needs of our customers.

“Kotak Mahindra Group’s pan-India distribution presence and Zurich’s distinct global capabilities in digital assets, B2B and B2C formats have the potential to create a transformational impact for the Kotak General Insurance franchise delivering innovation efficiently and rapidly in the Indian General Insurance space.”

The transaction is subject to regulatory approvals and customary closing adjustments.

Zurich Asia Pacific CEO Tulsi Naidu said: “India is one of the world’s most important markets with immense potential and we are pleased to be making a significant commitment with an excellent partner.

“With Kotak Mahindra Group’s high-quality franchise and expertise in Indian financial services and Zurich’s deep distribution experience and class-leading capabilities in retail and commercial insurance, we are confident this partnership can bring strong innovation, know-how and excellent customer experiences to the Indian general insurance market.”

A fully owned subsidiary of Kotak Mahindra Bank, Kotak General Insurance was established in 2015.