Mumbai/New Delhi, May 15: The Housing Development Finance Corporation is buying out Chubb Corporation’s 26 per cent in their insurance venture HDFC Chubb General Insurance Company.

At the same time, the HDFC is looking for a new partner in the general insurance company for which it has received feelers from various entities.

“We are keeping our options open for a good deal...though there is nothing on the cards yet. Depending on what sort of partner we find, we will take things forward,” Renu Sud Karnad, executive director of HDFC, told The Telegraph.

HDFC did not reveal the consideration it has paid for the acquisition, which marks an end to a five-year-old partnership. Sources at the housing finance company said the joint venture was not highly successful as the business strategies of Chubb and HDFC were different.

“When we formed a joint venture, there was a business plan that was agreed upon. However, there was a change in thinking on Chubb’s side. Chubb was a little more conservative and, in certain areas of general insurance, the business was not growing. We finally agreed that we needed to separate,” a source said.

The venture had largely focused on motor insurance while HDFC wanted to concentrate on all aspects of general insurance. As a result of this difference in strategies, the business growth of HDFC Chubb was flat in the fiscal just gone by when compared with competitors in the non-life insurance segment. “We made only a marginal profit and the business growth was flat,” the source added.

“We wanted to do much more, while they (Chubb) were happy with the way business was progressing,” said Karnad. Globally, Chubb has a robust portfolio in the commercial segment. Nearly 80 to 85 per cent of HDFC Chubb’s business is in retail and 15 per cent in the commercial segment. The retail-commercial balance in the general insurance industry is 55 per cent and 45 per cent.

As its new partner, HDFC is looking for a company that has experience in general insurance. Sources said the corporation would first concentrate on complying with the necessary formalities with regard to Chubb’s stake (it has to get the approval from the insurance regulator) and then it will look at the process of inducting a new partner.

Sources said HDFC would opt for a company which not only brings its expertise into the business, but also helps it in achieving all-round growth in the general insurance segment. Till then, HDFC Chubb will be run as a 100 per cent subsidiary.

Under the terms of the agreement, HDFC will buy 32,500,000 shares of Rs 10 each, subject to receipt of requisite approvals. Sources said the book value of the joint venture was about Rs 100 crore.

HDFC has a successful venture with Standard Life in life insurance.