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.”

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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.