The Hindu Business Line : Aviva shows interest in AMP Sanmar Life

THE UK-based insurance giant Aviva Plc has said it is open to acquiring the business of AMP Sanmar Life in the wake of AMP's recently announced plans to exit the insurance business in India.

AMP Sanmar Life is a 74:26 life insurance joint venture between the Chennai-based Sanmar Group and the Australian insurance major AMP.

Responding to a query whether Aviva would be interested in buying out AMP Sanmar as part of its inorganic growth strategy, the Aviva Life International Director, Mr Grant Barrans, said, "We are open to acquisitions in India. We will consider any opportunity that arises."

Aviva Plc, which is bullish on the Indian insurance space, expects India to contribute at least 10 per cent of its global revenues by 2015. Towards this, it has drawn up organic as well as inorganic growth strategies, Mr Barrans told a group of Indian journalists visiting Turkey.

Following AMP's announcement to exit the Indian insurance market, AMP Sanmar Life had announced that it was exploring options for restructuring the ownership of the venture, including outright sale to an existing or new player or bringing in a new partner.

The Chief Executive Officer of Aviva India, Mr Stuart Purdy, told Business Line that AMP Sanmar is expected to announce its "Information memorandum for the benefit of prospective buyers in the next three-four days. The merchant bankers appointed to scout for buyers have approached Aviva Life."

Aviva Life, which currently has a market share of 4.3 per cent, stands ninth among the Indian private insurance players. It aims to garner the top five slot by 2007. Having started its operations in the second quarter of 2002, Aviva Life currently has 34 branches spread over 27 cities across the country and has a force of financial planning advisors (FPA) of around 5,000. It has a paid-up capital of Rs 320 crore and plans to enhance the capital base to Rs 400 crore by January next year.

AMP Sanmar currently has operations in 68 cities with 76 branches. With a paid-up capital of Rs 217 crore and an FPA strength of 7,000 plus, the company has a market share of 0.8 per cent. "AMP Sanmar has a good presence in certain pockets of South India and looks attractive for acquisition. We will seriously look into the opportunity," Mr Purdy said. According to him, the entire acquisition process of AMP Sanmar would be completed in the next couple of months.

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