The Hindu Business Line : MetLife India keen on buying AMP Sanmar

Speaking to Business Line, Mr Venkatesh Mysore, Managing Director and Chief Executive of MetLife India, said, "We are always interested in an acquisition."

MetLife India is a joint venture of MetLife US, Pallonji and company and the Jammu & Kashmir Bank Ltd.

MetLife holds 26 per cent of the equity in the domestic venture, which currently has a paid-up capital of Rs 235 crore. Asked whether AMP Sanmar would be of interest, Mr Mysore declined to give a specific answer. Instead, he said, "We are interested in growth whether it is through acquisition or through organic means."

The Austrialia-based AMP and the joint venture partner Sanmar group, have expressed interest in exiting from the life insurance. The AMP Sanmar Life Insurance currently has a premium base of Rs 91.18 crore and has so far issued 35 lakh policies. Nearly 95 lakh lives insured by AMP Sanmar were through group insurance schemes, according to figures available with the Insurance Regulatory and Development Authority (IRDA).

MetLife's interest in AMP- Sanmar stems from this large group insurance base. Its group insurance covers 1.6 lakh lives. The world's largest insurer, it has substantial interest in group insurance business. The top 100 global corporates are its customers for group coverage, gratuity and pension plans.

MetLife India during the last financial year has grown by 140 per cent and recorded a premium income of Rs 56 crore, two years after issuing its first policy. Only about 30 per cent of the policies issued were unit-linked policies. The remaining 70 per cent of the products were from savings-linked or pure risk policies both group and retail. These also included, the mortgage-linked plans that are of interest to housing financiers.

MetLife , Mr Mysore said, preferred to contain the growth of unit-linked plans to this limit to protect policyholders' interest. This was particularly because policyholders faced the prospect of negative returns on investments in the event of a stock market downturn.

But, unlike unit-linked plans, conventional plans required greater capital. Accordingly, the parent company was prepared to put in more capital, Mr Mysore said. This year, the joint venture partners would be infusing another Rs 120 crore this year, he said. This would raise the paid up equity to Rs 355 crore. Most of the capital, he said, was utilised for building up life insurance infrastructure in the country. MetLife so far has expanded to 42 offices covering 27 cities in the country.

However, he said, the growth was constrained by the Government's ceiling on foreign investor participation in the insurance industry.

"We are ready to bring in up to $1 billion if the Government liberalises the FDI norms," he said.

"We are prepared to bring in this capital with all the safeguards prescribed by the Government or IRDA."

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MetLife India keen on buying AMP Sanmar