Aviva becomes first foreign insurer to fully own India life business after FDI rule change

Aviva has agreed to buy Dabur Invest Corp's remaining 26% stake in its India life venture. The deal makes it the first foreign insurer to fully own an Indian life business under the new FDI rules.

In Short

• Aviva acquires remaining 26% stake in its Indian life insurance unit from Dabur
• First full foreign ownership deal post 100% FDI approval in insurance sector
• Full ownership expected to boost strategic decisions and faster expansion

British insurer Aviva has become the first foreign life insurance company to take full ownership of its Indian business after agreeing to acquire the remaining 26% stake in Aviva Life Insurance Company India from its joint venture partner, Dabur Invest Corp.

The transaction marks the first such deal since the Centre allowed 100% foreign direct investment (FDI) in the insurance sector earlier this year, ending the requirement for foreign insurers to operate through Indian joint venture partners.

Aviva confirmed the acquisition on Thursday, while the proposed transaction had earlier been reported by Economic Times, citing people familiar with the matter. Reuters later reported that the deal has now been agreed.

The London-headquartered insurer, however, did not disclose the financial terms of the transaction and said the acquisition is not expected to have a material financial impact on the group, Reuters reported.

FIRST DEAL UNDER NEW FDI REGIME

The acquisition follows one of the biggest policy changes in India's insurance sector in recent years.

The government raised the foreign direct investment limit in insurance companies to 100% from the earlier 74% of paid-up equity capital, opening the door for overseas insurers to own their Indian businesses outright.

Aviva's acquisition is the first major life insurance transaction under the new regime and is expected to be closely watched by other multinational insurers operating in India.

A 25-YEAR PARTNERSHIP COMES TO AN END

Aviva entered the Indian insurance market in 2001 through a joint venture with Dabur Invest Corp, shortly after the sector was opened to private players.

The company has gradually increased its ownership whenever regulations were relaxed.

According to Reuters, Aviva raised its stake to 49% in 2016 following changes in FDI rules and increased it further to 74% in 2022 after another policy revision. With the latest acquisition, it will now own 100% of the Indian life insurance business.

The transaction also brings to an end Dabur's association with the insurer, which has lasted for more than two decades.

Industry experts believe full ownership gives multinational insurers greater flexibility to take strategic decisions, deploy additional capital and accelerate expansion in one of the world's fastest-growing but least-insured insurance markets.

People familiar with the development had earlier told Economic Times that full ownership would allow Aviva to make decisions faster and focus more aggressively on expanding its India business.

"The company was not really growing. It was largely managing its solvency position. Full ownership should provide greater strategic flexibility and enable faster decision-making," a person familiar with the matter had told Economic Times.

HOW HAS AVIVA INDIA PERFORMED?

Despite maintaining healthy capital levels, Aviva remains a relatively small player in India's life insurance industry.

As of March 31, 2026, the insurer managed assets worth around Rs 16,316 crore and reported premium income of Rs 1,343 crore for FY26, up 2.8% from a year earlier. New business premium rose 10% to Rs 351 crore.

Profit after tax, however, declined 21.7% year-on-year to Rs 84.15 crore.

The insurer's solvency ratio stood at 188%, well above the regulatory requirement of 150%, while shareholders' funds were Rs 878 crore. According to the ET report, the company has struggled to significantly scale up its business, partly because of its relatively small network of 93 branches in a market dominated by bancassurance partnerships.

Aviva's move could become a template for other foreign insurers that have long sought greater control over their Indian operations.

With the FDI limit now raised to 100%, industry observers expect more global insurance companies to evaluate buying out their Indian partners as they look to deepen their presence in one of the world's largest and fastest-growing insurance markets.

- Ends