Howden, an international insurance broker, has received insurance regulator IRDAI’s approval to raise its shareholding in Howden Insurance Brokers India Private Limited (Howden India) from 49 per cent to 100 per cent, said Praveen Vashishta, Chairman, Howden India.
However, this transaction is subject to approval from the Reserve Bank of India.
Inorganic growth
The gaining of 100 per cent ownership will strengthen Howden India’s ability to look at the right acquisitions, Vashishta said. He added that 100 per cent ownership brings a change in commitment — the level of commitment and attention goes up, and these are big drivers for any business.
“Our growth in India so far has only been organic. This 100 per cent ownership will give us the muscle to do acquisitions. We are keeping our ears and eyes open, and are more alert to idea of inorganic growth. But we don’t want to look at acquisitions for acquisition sake. It has to be right strategic fit and right cultural fit,” Vashishta told BusinessLine.
Plans to double revenue
Howden India operates through offices in seven cities — Mumbai, Delhi, Bengaluru, Kolkata, Chennai, Hyderabad and Pune. It’s key product lines include construction and property, liability and special risks, and employee benefits; it manages over ₹1,600 crore in premiums. The company, which got its trading licence in 2004 as a composite insurance broker, is now aiming to double its revenue in India from ₹125 crore to ₹250 crore by 2025. It is also looking to ramp up its employee base from to 400 people (from 250) within the same time frame.
“Combined with organic and inorganic growth, we clearly aim to be a sizeable player in next 3-4 years”, Vashishta said.
Foreign investment
The Union Budget 2019-20 had permitted 100 per cent foreign direct investment (FDI) in insurance intermediaries. Consequently, the Department for Promotion of Industry and Internal Trade (DPIIT) amended the FDI policy in February 2020 to allow 100 per cent FDI for insurance intermediaries, which includes insurance broking, third party administrators, surveyors and loss assessors.
The London-headquartered Howden Group, which is 27 years old and started its journey in 1994 as wholesale reinsurance broker, now has operations in 45 countries with about 10,500 employees. Howden is the largest insurance broker in Europe besides being one of the largest employee-owned insurance groups in the world.
Vashishta said Howden India is positioning itself to be a “credible alternate” to the top three American brokers —including Willis Towers Watson and Marsh, who have operations in India as well.
Surety insurance
Vashishta also said that Howden India has more recently enhanced its focus on surety insurance.
“We are putting in place all the building blocks for surety insurance, which was recently opened. We are sizing up the market, have set up a team on surety, and are working closely with colleagues in London, Singapore and Latin America to bring the best-in-class surety solutions in India,” he said.