QBE Group is to raise its stake in Indian joint venture Raheja QBE General Insurance Company to 49%, buying an extra 23% from partner Prism Cement for $21.5 million.

“QBE has a historical association with India, and this is an excellent opportunity to increase our participation in India’s dynamic economy,” a spokesman told insuranceNEWS.com.au.

In 2007 when it entered the joint venture with Prism, QBE expressed a desire to raise its stake to 49% when such a holding became legal.

“We are excited that this can now happen,” the spokesman said.

Foreign insurance partners were previously restricted to a maximum of 26% participation in Indian ventures, but the law was changed earlier this year.

QBE’s proposed transaction is subject to regulatory approval, which is expected within a few months.

McKinsey & Company recently estimated the Indian non-life insurance market will grow to as much as $US85 billion by 2025, up from $US17 billion ($23.25 billion) now.

Raheja QBE General Insurance Company distributes through relationships with about 30 brokers in India. It has about 500 corporate clients on its books.

Demand for specialist commercial products is expected to grow in India, and QBE will strive to dominate the space by diversifying distribution with Prism and the Raheja Group.

Bancassurance opportunities will also be explored following regulatory changes that have created an open architecture for such distribution.

QBE Asia-Pacific last year introduced online insurance portal QBE Qnect in Hong Kong and Singapore, which enables brokers and agents to transact direct with the insurer.

“The portal is a proven success,” the spokesman said. “We will look into the possibility of bringing this to our operation in India.”