SBI to hold majority stake in non-life insurance operations with Australia's IAG

14 May 2008

State Bank of India (SBI) has announced a general insurance joint venture with Australia's Insurance Australia Group (IAG), which will commence business in the current financial year.

The two financial groups had been holding talks for over 18 months.

India's largest bank said that it had signed a memorandum of understanding (MOU) yesterday to form this non-life venture in which it would hold a majority 74-per cent stake.

SBI expects both companies to finalise a shareholders' agreement and obtain regulatory approvals. Once approvals are granted, the joint venture is expected to commence writing business in 2009.

''Establishing a general insurance joint venture is a key element of SBI's strategy to pursue emerging, high growth opportunities to build on our position as a pre-eminent financial services group in India,'' said Deepak Chawla, deputy managing director, SBI.

IAG chief executive officer Michael Hawker said he was pleased IAG had been selected by SBI ahead of a number of major international insurers.