Shriram Group of Chennai has decided to step into general insurance segment with setting up a joint venture in association with Sanlam of South Africa.

The venture will involve a capital of Rs 105 crore, in which Sanlam will hold 26 per cent of stakes whereas Shriram Financial Services and Holdings Private Ltd, an entity of Shriram Groups will have 74 percent of stakes in this JV.

The Shriram General Insurance Company, which would be based in Jaipur would formally go on stream on July 23.

The new venture will start functioning with the launch of 15 products approved by the Insurance Regulatory and Development Authority (IRDA) of India. The company initially will focus mainly on motor, fire, personal accident retail insurance and expects to have a premium income of Rs. 200 crore in the first full year of its operations.

R. Thyagarajan who is the chairman of the Sriram Group confirmed that the JV would help Sanlam to increase its stake to 49 per cent.

He further added, “New entrants into the general insurance business had focused only on getting a share of the existing premium income. No attempt has been made to garner premium by creating new markets for general insurance business.”