AMP Ltd dumps UTI for Sanmar group, in life insurance venture

In a sudden turn of events, Australia's leading life insurer and fund manager AMP Ltd., which recently entered into a memorandum of understanding (MoU) with UTI for starting a life insurance company in the country, is likely to scrap the MoU. AMP is now said to be negotiating with the Chennai based Sanmar group for the purpose.

It may be recalled, AMP, after taking over GIO Australia Holdings Ltd., was not in favour of any overseas general insurance venture. Consequently the MoU between GIO Australia and the Sanmar group was scrapped.(see Sanmar GIO break up insurance plan).

With the break-up and the agreement between AMP and UTI, the Sanmar group had in fact started scouting for a new partner. With prospective players favouring life insurance sector over general insurance, Sanmar group had discussions with UK-based, Old Mutual, for entering the life insurance sector.

Mr. N. Sankar, chairman of Sanmar group says confirmed this move to be true and that the group was in discussions with AMP.

What might have turned AMP in favour of Sanmar group is the "S.V. Mony factor". It may be interesting to note that, in all its negotiations with foreign insurers after the GIO Australia deal was scrapped, the Sanmar group had made it clear that it wanted   Mr. Mony, director (India) for GIO Australia and former chairman, General Insurance Corporation of India (GIC), to head the prospective joint venture company.

It is understood that, Mr. Mony who was looking after the reinsurance operations of GIO Australia and AMP in South East Asia, was ready to put in his papers when the AMP did not show much interest in an overseas general insurance outfit. However, he was requested to continue in his post till AMP took a final decision on its India plans. Fortunately for both, AMP finally decided to go ahead with the India plans, and decided to do so through the Sanmar group.