Yet another insurance marriage is breaking before it could be consummated. This time it's the union between the Chennai-based Sanmar group and GIO Australia Holdings Ltd of Australia.

The $ 2.7-billion GIO Australia, specialising in insurance, financial services and asset management, was recently taken over by Australia's largest fund manager and life insurer, AMP Ltd, after a fierce battle. After that GIO has been having second thoughts on overseas general insurance ventures. This is partly because of some sizeable losses AMP suffered in its general insurance business back home, it is believed.

AMP is now training its guns on the life insurance sector in Japan and China. A general insurance venture in India in not on its priority list. Also, AMP has signed a memorandum of understanding with Unit Trust of India for a life insurance joint venture in India, and it is unlikely to want to disturb that arrangement. There are others rushing into the life insurance business.

With no choice in the matter, the Sanmar group has started scouting for a new partner for its proposed general insurance foray. Confirming the development N. Sankar, chairman of the group, says, "The world over AMP is now focussing on life insurance. And we, with our skills in underwriting general insurance business, are now talking to several (other) interested parties."

Sanmar group has made presentations to Japanese insurers such as Yasuda Marine and Fire, Mitsui Marine and Fire, Tokio Marine and Fire, and Chubb Corporation, USA. "We also held talks with Old Mutual to enter the life insurance sector," Sankar adds.

In all its negotiations, it is learnt, the Sanmar group makes it clear that S.V.Mony, director (India), GIO Australia, and former chairman, General Insurance Corporation of India, will head the insurance joint venture!

Mr Mony is currently looking after the reinsurance needs of GIO Australia and AMP in South East Asia. It is learnt that he was ready to put in his papers when AMP didn't show much interest in a general insurance venture in India after it took over GIO Australia last December. However, AMP has asked Mr Mony to continue in his present position till a final decision is taken on its Indian plans.

If AMP decides to drop its general insurance plans for India, GIO Sanmar Risk Management Services Ltd, the Rs 50-lakh equity-based joint venture, will also be affected. The risk management company, in which Sanmar and GIO Australia share stakes in a 51:49 ratio, started its operations very recently.

Many an Indian insurance marriage has fallen apart since the talk of opening up the insurance industry started. The divorces include ITC:Eagle Star, Cholamandalam-Sun Alliance; DCM group-Royal Sun Alliance; Chubb Corporation-Kotak Mahindra; and Sundram Finance-Winterthur.

The Chennai based Cholamandalam group is once again negotiating terms with Axa of France as the latter has taken over Guardian Royal Exchange. Cholamandalam, it may be recalled, had signed an MOU earlier with Guardian Royal Exchange for starting an insurance company here. It is learnt that Axa is insisting that it should have the right to appoint the chief executive officer of the proposed Indian insurance company.