All eyes are on Sanmar

Venkatachari Jagannathan
22 June 2005

In an unprecedented move, both the Indian promoter and the foreign collaborator want to quit their insurance JV.

Chennai: Even as the insurance vultures have started circling over the AMP Sanmar Life Insurance Company Limited, industry watchers are keenly watching the Sanmar group.

Will the group bite the bullet by buying out AMP's stake in the life insurance company and go solo with professionals at the helm, they wonder.

Interestingly, the group has not exercised its right of refusal to AMP's stakes in the life insurance company. Attempts are being made by some officials to convince the Sanmar top management to go it alone.

The Rs 217.50 crore equity-based AMP Sanmar Life is a 74:26 joint venture between the Chennai-based Sanmar group and AMP ASAL Pty Ltd, part of the Australian wealth management group AMP. While the latter ran the show, Sanmar remained content with board memberships.

Recently AMP surprised the insurance sector by announcing its intention to exit the Indian joint venture to focus on its wealth management business in Australia and New Zealand.

Says AMP Sanmar Life's managing director, Graham Meyer, "In the past, as a traditional life insurance company, AMP earned revenues from premiums on policies and providing guarantees on the capital it had invested. Today AMP's revenues are increasingly driven by fees for services and the value of assets under management." According to him, AMP believes the time is now right to review its presence in India.