6 may 2000

iffco inks insurance jv with japanese giant
mumbai: indian fertiliser cooperative iffco, will shortly sign an agreement with japan’s largest non-life insurance company, tokio marine & fire insurance to enter the non-life insurance business in india. iffco will pick up 74 per cent in the non-life insurance joint venture company, tokio marine will hold the rest.

the joint venture is the first of its kind — this is the first tie-up agreement by a japanese insurer in india. also, it’s the first time that a co-operative, namely iifco, is entering the insurance business.

although the main promoter is a co-operative — the insurance venture will be a company and will be governed by the companies act. according to sources, the venture could possibly require clearance from the registrar of co-operative societies, as insurance is an entirely different line of business for the fertiliser co-operative. however, with the government backing the venture, this is unlikely to be a problem.

in the non-life area, iffco’s captive business will come in handy. the fertiliser cooperative will use its network of societies as one of the main distribution channels for its insurance products. the company is also looking at introducing a special package for the fertiliser industry. further, iffco is active in rural areas and this will help the venture to respond to the government’s drive to optimise involvement in that area.

insurance is a capital-intensive business, and it is necessary that the promoters have strong financials. for, over the years they should be able to contribute to the growth and margin requirements.

besides tokio marine, three other japanese insurers have set up liaison offices in india. they include mitsui marine & fire, yasuda marine & fire, sumitomo marine & fire.
sources said that the japanese companies had been slower in finalising their entry plans in the country thanks to the changes going on in the japanese financial markets.

hsbc to launch a range of products & services
calcutta:given the change that is driving the indian banking industry in recent times, the hongkong and shanghai banking corporation (hsbc) has carved out a three-year strategy encompassing launching a whole range of products and services.

according to mr. zarir j cama, the bank’s chief executive officer in india, the parent company is to soon set up a wholly owned subsidiary in india to help in back-end operations in india. to be set up in hyderabad, the new entity named hsbc data processing will shortly employ about 250 people to run its operations in india.

the bank also plans to set up an asset management company and launch its own mutual funds, shortly. it may also set up a nbfc to handle the bank’s consumer finance portfolio, which is stated to be worth almost rs. 700 crore.

insurance is another area where hsbc is likely to focus on. mr cama said that talks were on with global insurance majors including royal & sun alliance, aig, commercial cgu to market their products in india.