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M. Ramesh

The takeover of TTK Insurance Services by the Shriram group has been completed. TTK Insurance has been renamed Bharat Re.

Chennai , Feb 25

CHENNAI-based Shriram group, which has filed an application with the Insurance Regulatory and Development Authority for a life insurance licence, is in talks with at least five overseas insurance companies for a possible joint venture.

The group is in talks with Sanlam of South Africa, Asso Curiazoni Generali of Italy, Axa, CNP of France and Fortis of Belgium, the group's Chairman, Mr R. Thyagarajan, told Business Line on Friday. But the most probable suitors are Sanlam and Asso Curiazoni. A decision is expected to be taken shortly.

The newly created holding company of the group, Shriram Financial Holdings Ltd,will be the main promoter of the life insurance company.

Mr Thyagarajan said the group's primary strength is its network of 600 offices and over 65,000 agents across the country. The network was developed over nearly 30 years.

Private sector life insurance companies in India have been required to bring in more and more capital each year. For instance, ICICI Prudential Life raised its capital to over Rs 900 crore. Last week, AMP Sanmar announced a hike in its capital to Rs 217 crore.

Asked if the Shriram group had enough financial muscle to keep shoring up the capital of its life insurance venture, Mr Thyagarajan said Shriram Life might not need too much capital. He said unlike most other companies, Shriram group had "a huge pool of trained salesmen", who specialised in selling financial products (chits).

"Creating an agency force is an expensive affair," said Mr Thyagarajan, adding that most companies had to spend huge amounts of money to create their selling force. Shriram group, on the other hand, starts off with a trained fleet of agents who only need 100 hours of training in insurance products, he said.

If it has such obvious strengths, why didn't the group enter life insurance earlier? Mr Thyagarajan said the group realised that its people could sell life insurance products only when it became a corporate agent to AMP Sanmar Life. "It was a very revealing experience," he said.

Mr Thyagarajan said the group would soon enter non-life insurance. Meanwhile, the takeover of TTK Insurance Services by the Shriram group has been completed. TTK Insurance has since been renamed Bharat Re and will focus exclusively on reinsurance broking.

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