Mahindra & Mahindra Group, the biggest farm equipment makers in the country, is planning to tie-up with an experienced company to venture into the Rs. 40,000-crore general insurance business, which is growing at around 20% a year.

The group, which has a lending business in Mahindra & Mahindra Financial Services Ltd, has mandated consultants KPMG to find a partner who would have technical experience in running a general insurance business, including writing covers for industrial accidents and automobiles.

Mahindra Group, a $12.5-billion multinational conglomerate, has presence in automotive industry, aerospace, consulting services, defence, energy, financial services, logistics, real estate, retail, and two-wheelers industry. "Mahindra is entering into the insurance segment. It makes sense for a conglomerate like them to look at this space. For this the company has given out the mandate to KPMG," said a source.

The group is present in the insurance broking business through Mahindra Insurance Brokers. Magma is the last NBFC to enter into non-life space by manufacturing insurance products.

Mahindra will be the 24th non-life insurer in the industry. There are 23 non-life insurance companies, of which four are public sector insurers. The entry of new players could put pressure on premium rates.

"Every time a new insurance company comes, premium drops. Initially companies offer high discounts and lower premium to grab the market," said a senior executive of a non-life insurance. The industry had posted a 22% growth in gross premium income during 2010-11, compared with a year earlier.