Jio Financial Services to enter insurance sector, to offer life, health, general cover; may partner global firms

On August 28th, Reliance Industries' chairman Mukesh Ambani said that Jio Financial Services would be entering the insurance industry to offer life, general, and health insurance products.

During his address to shareholders, Ambani said, "Jio Financial Services will...offer simple, yet smart, life, general, and health insurance products through a seamless digital interface, potentially partnering with global players."

In addition, he stated that JFS would utilize predictive data analytics to co-create contextual goods with partners and provide individualized service to customers.

On August 21, JFS debuted on the bourses as a standalone company. In the demerger, shareholders received one share of JFS for every share of RIL they previously owned. In his words, "it was like a mini bonus for our shareholders," Ambani characterized the distribution to investors.

Jio Financial Services' tie-up with Blackrock

JFS has announced its entry into the insurance market with a prospective worldwide partner, following its partnership announcement with Blackrock, a global leader in the asset management business.

This industry (financial services) requires a large investment of money. Ambani remarked that RIL's financial backing will allow JFS to "build a best-in-class, trusted financial services enterprise."

He further mentioned that Reliance has given JFS initial funding of Rs 1,20,000 crore, making it one of the most well-endowed financial service platforms in the world.

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Insurance a great opportunity for Jio Financial Services

CLSA, a foreign brokerage firm, said in a recent study that Jio has a broking business in place with more than 17 insurance partners, and that this business may be expanded quickly. India's life insurance penetration is about the same as the global average, but the country's non-life insurance coverage lags well behind. For JFS, this is a golden chance.

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"We believe covering more lives could be a key focus area for Jio... it will be interesting to see the impact Jio can have on pricing in the industry." CLSA analysts speculate that Jio's point of entry could be relationship-driven categories such group health and commercial insurance.

The share price of Jio Financial Services fell 2.05 percent to settle at Rs 210.10 on the NSE.