| Long road ahead
Istanbul, June 12: Aviva Plc, the British life insurer, is ready to buy AMP Life's stake in AMP Sanmar Life Insurance. Recently, AMP, the Australian insurance major, had announced plans to pull out ofits Indian life insurance venture with the Sanmar group.
'We'll consider any opportunity and are open to acquisitions too,' said Grant Barrans, director of Aviva Life International.
Sources said international insurance companies, which have been eyeing the life insurance market in India, would consider buying out AMP from the life insurance venture.
The joint venture between AMP Life and Chennai-based Sanmar group has been exploring options for restructuring the ownership. This includes selling stakes to an existing player or bringing in a new partner.
The move has been initiated following the Australian partner's decision to exit life insurance business in India. AMP Life holds 26 per cent and Sanmar 74 per cent in the venture.
Aviva Plc, which has a history of growing through mergers and acquisitions, is keenly watching the developments and examining the regulatory aspects.
'It will be interesting to see how the business of AMP Sanmar is absorbed,' said Stuart Purdy, CEO of Aviva India. His comments came at the launch of a group gratuity scheme and a single-premium unit-linked plan.
Market speculation is that one of the existing private players may attempt to acquire AMP Sanmar. It could also be a new player willing to enter India by snapping up an existing firm.
Aviva's interest in buying AMP Sanmar stems from its desire to become one of the top five private players in India within the next few years.
Aviva India is ranked ninth among private players with a 4.3 per cent market share. 'Aviva Plc is bullish on India. The company expects the Indian operations to contribute 10 per cent to its global revenues in the next 10 years,' Grant said.
The company is also planning to enter India's pension business as and when it is opened up for private players. Grant, however, ruled out Aviva's foraying into general and health insurance market here. It has decided to consolidate the general insurance business in matured markets and concentrate on the life insurance business in emerging markets.
The British insurer, which manages assets worth $ 500 billion worldwide, is also looking at other markets like Malaysia, Taiwan and Sri Lanka. In addition, it plans to expand in China, Grant said.
Aviva India contributes less than 1 per cent of Aviva Plc's global premium income. Grant said if the FDI limit in insurance is raised from 26 to 49 per cent, India's contribution to its overall business will be higher.