The Hindu Business Line : Aviva rules out third partner in Indian venture

Mr Stuart Purdy, Managing Director, Aviva Life Insurance (second right), greeting Mr Peter D.F. Cardozo, Managing Director, Can Fin Homes Ltd (left), at a press conference in Bangalore on Wednesday. Also seen are Mr S. Doreswamy, Chairman, Can Fin Homes Ltd (second left), and Mr Rajesh Relan, Director, Bancassurance and Business Partnerships, Aviva Life (right). — K. Gopinathan

Bangalore , July 14

AVIVA Plc UK has ruled out inclusion of a third partner in its joint venture life insurance company in the country. Aviva Life Insurance India Pvt Ltd is a joint venture between Aviva Life Plc and Dabur India Ltd, where the domestic partner has a 74 per cent stake.

Speaking to newspersons here on Wednesday, Mr Stuart Purdy, Managing Director, Aviva Life Insurance Company Pvt Ltd, said, "Our partnership with Dabur will remain and there is no question of a bring in a third partner."

But Aviva Plc is poised to increase its stake in its Indian arm once the amendment to the Insurance Regulatory and Development Authority is passed. Mr Purdy said, "We will meet the capitalisation requirements for Aviva Life once the law is passed." Aviva Life is currently capitalised at Rs 243 crore.

Mr Purdy indicated that the foreign partner would bring in the additional equity for the venture. This would push up the equity stake in the venture to 49 per cent. Asked whether the equity infusion would be premium priced, he said that nothing has been decided so far.

However, he added, joint venture partners were concerned about the opposition to the amendments to the statute. This was particularly since, joint ventures in China and other economies opening up permitted up to 50 per cent foreign equity. "If the amendment is scuttled, we will be disappointed," he said. Aviva launched its home loan cover policies with CanFin Homes Ltd, a subsidiary of the public sector Canara Bank. This product, designed for CanFin Homes customers, has been branded as LoanShield. Aviva already has a bancassurance arrangement with Canara Bank.

Mr Purdy said that these products would allow Aviva to accelerate its growth in the country. LoanShield allowed borrowers to provided a safety net to borrowers. Besides, for the lending institution, such an insurance cover also prevented the asset from becoming a non-performing asset in the event of the borrower's demise.

The premium for the product would be structured as a single premium with covers up to Rs 1 crore. However, for covers up to Rs 8 lakh the mandatory medical check-up would be waived, Mr Rajesh Relan, Director, Bancassurance and Business Partnerships of Aviva Life, said.