Larsen & Toubro (L&T) may enter into a strategic alliance with Zurich-headquartered Swiss Re to set up a health insurance joint venture (JV) in India.

Sources familiar with the matter told "Swiss Re will pick up 26% stake in the proposed JV, which will be the international reinsurer’s second attempt to foray into highly attractive Indian insurance market."

A memorandum of understanding (MoU) for the proposed partnership has not been issued, however, confirming the development an undisclosed official revealed to the news agency that the "matter has not yet gone to the Insurance Regulatory Authority of India (IRDA)."

Swiss Re and L&T declined to comment on the development.

The health insurance segment of the Indian insurance market has seen premiums growing at a pace of 25-30% annually and is set to be the largest contributor to the nearly Rs654bn Indian general insurance industry, according to industry sources.

For the year ended on 31 December 2011, Swiss Re’s premium earned and fee income from both health and life insurance space increased by 4% to Rs549.7bn while operating income slumped by 43% to Rs25.25bn.