The move has placed the US-based insurer ahead of competitor Zurich Insurance Group.
One of the sources said that Chubb is more open than Zurich about leaving control with Kotak Mahindra Bank, which thinks it has more common areas of interest with Chubb, including auto insurance.
Zurich was planning to buy either a 49% or 51% stake, with the majority of the stake being expected to value the company at approximately $800m, the sources previously said.
However, if Chubb secures the deal, it would value Kotak at less than $800m due to the exclusion of a so-called buyout premium.
Kotak is a smaller general insurance company under the control of Uday Kotak and has been exploring options to sell a stake to gain faster growth in the market.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
The company is still negotiating with Zurich even after the failure of separate discussions with private equity firm Carlyle, said the unnamed source.
Both Chubb and Kotak refused to disclose any details on the development. In addition, neither Zurich nor Carlyle provided any statement.
If the deal materialises, it will mark Chubb’s return into India’s insurance market after the conclusion of an agreement with HDFC General Insurance 2007.
Chubb primarily focuses on the property and casualty insurance sector and currently has business in 54 countries worldwide. It has around $200bn in assets.