Sanmar, GIO break up insurance plan

Venkatachari Jagannathan
21 March 2000

Yet another insurance marriage is breaking before it could be consummated. This time it's the union between the Chennai-based Sanmar group and GIO Australia Holdings Ltd of Australia.

The $ 2.7-billion GIO Australia, specialising in insurance, financial services and asset management, was recently taken over by Australia's largest fund manager and life insurer, AMP Ltd, after a fierce battle. After that GIO has been having second thoughts on overseas general insurance ventures. This is partly because of some sizeable losses AMP suffered in its general insurance business back home, it is believed.

AMP is now training its guns on the life insurance sector in Japan and China. A general insurance venture in India in not on its priority list. Also, AMP has signed a memorandum of understanding with Unit Trust of India for a life insurance joint venture in India, and it is unlikely to want to disturb that arrangement. There are others rushing into the life insurance business.

With no choice in the matter, the Sanmar group has started scouting for a new partner for its proposed general insurance foray. Confirming the development N. Sankar, chairman of the group, says, "The world over AMP is now focussing on life insurance. And we, with our skills in underwriting general insurance business, are now talking to several (other) interested parties."

Sanmar group has made presentations to Japanese insurers such as Yasuda Marine and Fire, Mitsui Marine and Fire, Tokio Marine and Fire, and Chubb Corporation, USA. "We also held talks with Old Mutual to enter the life insurance sector," Sankar adds.

In all its negotiations, it is learnt, the Sanmar group makes it clear that S.V.Mony, director (India), GIO Australia, and former chairman, General Insurance Corporation of India, will head the insurance joint venture!