In search of Asian tigers

Chennai: "We have an understanding with our Indian partner to reverse the shareholding pattern in the Indian life insurance joint venture that is say, once the regulations permit us to do so," says AMP International managing director, Tim Wade.

AMP International, the Australian funds management giant that manages assets worth $150 billion, has entered into a 26:74 life insurance joint venture with the Chennai-based Sanmar group to promote AMP Sanmar Assurance 

For both the parties, the life insurance joint venture has come about after changing several partners. AMP had initially signed a memorandum of understanding with the Unit Trust of India. On its part, the Sanmar group had tied up with the Australia-based GIO, AMPs subsidiary, to enter the general insurance sector.

The change of partners came about when AMP decided to alter its business-mix and exit non-core areas worldwide. It sold its stakes in GIO and exited worldwide the general insurance business. As per its revised plans, the group will like to have just 10 per cent of its cash flows from life insurance operations and the balance from managing assets. Finally it decided to partner with the Chennai industrial group for the life insurance business.

After becoming the leader in its three home markets Australia, New Zealand and the UK AMP is now charting its path to Asia, attracted by the high savings rate. AMP is focussing on limited Asian markets that offer high-growth potential but involving minor capital commitment.

AMP recently entered Japan with business alliances and it hopes to replicate the same in other Asian countries like Taiwan. In India, a combination of a high domestic savings rate (23 per cent), a strong 18-per cent insurance growth and a low insurance penetration made the Australian group ink the deal with Sanmar. The Australian group will leverage its competencies in distribution, insurance, pensions and protection plans here. While life insurance is the entry point to India, AMP also plans to expand into other areas like mutual fund and banking here.