The company will make an initial investment of Rs 5-10 crore towards technology set-up, manpower hiring, and training certification costs.

Mahindra and Mahindra Financial Services (Mahindra Finance) will enter the general, life, and health insurance distribution business.

The board on Thursday approved undertaking supplemental business activity of soliciting and procuring insurance business as a composite corporate agent in the areas of life, health and general insurance – both group and individual.

The company said in an exchange filing that the decision is subject to obtaining approvals from the Insurance Regulatory and Development Authority of India and no-objection from the Reserve Bank of India and other regulatory authorities.

“The corporate agency licence will help the company diversify its sources of income,” Mahindra Finance said in an exchange filing, adding that the expected net fee income from the business could be around 0.1-0.2% of its standalone average assets over the next one-to-three years.

The company will make an initial investment of Rs 5-10 crore towards technology set-up, manpower hiring, and training certification costs.

In recent times, many non-bank lenders have landed up at the Irdai doorstep for corporate agent licences. As they are dealing with high cost of funds, such a licence will enable them to earn fee income.

Earlier this week, Capri Global Capital announced that it has received a corporate agency licence from Irdai. Grihum Housing Finance, formerly known as Poonawalla Housing Finance has also applied for a corporate agency licence.