Life Insurance Corporation of India has hiked its stake in the country’’s largest public sector lender, State Bank of India, to 10.02 per cent, through an open market transaction. LIC of India has purchased 1,90,000 shares representing 0.03 per cent stake in the bank, State Bank of India (SBI) said in a disclosure on the Bombay Stock Exchange.

Prior to the said purchase, the company held 9.99 per cent stake, while now it holds 10.02 per cent stake in the bank.

The country’s largest bank, State Bank of India (SBI)  is likely to start its general insurance business by March next year.

SBI Chairman O P Bhatt told reporters  on Monday “We hope to start general insurance operations before the end of the current fiscal. We already have got stage one approval from from Insurance Regulatory and Development Authority (Irda),”.

The bank has also got RBI approval for the business, informed by him, furthuer he added that the proposed venture would apply for the second stage of approval Irda shortly. The general insurance venture promoted by SBI and Insurance Australia Group (IAG) of Australia has started recruitment of top level management for the company.

SBI holds a 74 per cent stake in the joint venture with IAG the remaining 26 per cent.

The bank is present in life insurance space with BNP Paribas Assurance. SBI Life, as per the Irda data, ranks first amongst private life insurance companies in terms of new business premium collection.

(source:business-standard)

MetLife India Insurance on Monday announced its plan to enter into the health insurance sector with the launch of an innovative scheme ‘Met Health Care’.  This scheme will offer daily cash benefits in the case of hospitalisation and the option of undergoing no medical test before availing of the cover.

Benifits of the scheme:-

According to the company the product will offer its customers a daily cash benefit in the case of hospitalisation and a lump sum benefit in the case of critical illness or accidental total and permanent disability.

At the same time, customers are not required to undergo any medical tests to avail themselves of this plan.

MetLife India Managing Director Rajesh Relan said health insurance in India was today recognised as one of the primary protection needs for a family.

The launch of the scheme would significantly complement the company’s existing products and services. MetLife has been among the top three fastest-growing life insurance companies for the last 30 months.

Even in the slowdown the company grew at 40 per cent last year.

The product is being launched with comprehensive training to financial advisors across the country to provide need-based solutions to customers, Mr. Relan said.

He said the company believed in a multi-distribution approach for reaching customers across the length and breadth of the country. MetLife has over 55,000 financial advisors, all of whom have gone through rigorous training to understand customer needs.

Japan’s second largest insurance company Mitsui Sumitomo Insurance group (MSIG) is ready to increase its stake in Indian joint venture  Cholamandalam MS General Insurance Company (Chola MS). It is also betting big on the Indian market and expects the JV to become the group’s largest overseas company in the near future.

The six year old Chola MS has  a 74:26 between Murugappa group and MSIG. It has emerged one of the fastest growing general insurance companies in India with increasing its  premium from Rs 150 crore to Rs 684 crore in 2008-09. It also scaled up network to 113 offices.

In April, the promoters infused Rs 75 crore capital increasing the paid up capital to Rs 217 crore to support its growth largely happening in the motor and health segments.

MSIG President & CEO, Toshiaki Egashira unfolded his strategies for JV to the media persons in Chennai on Tuesday, ” If the Indian Government permits, we are willing to increase our capital investment in the venture in the future”.

Further he said, “He would also support in implementing the customised technical expertise of MSIG in key areas such as reinsurance, risk management and compliance. it would provide training to the employees of JV in Japan and Singapore”.

He said currently, MSIG- Mingtai, a 100% subsidiary, is the biggest overseas company of the group. it has turnover 36 JPY Billion and was ranked fourth largest in Chinese Taipei.

Edelweiss Capital is in talks with Japanese insurance group Tokio Marine Holdings for a possible joint venture in life insurance. The Japanese insurer, which is already has its presence in India through a non-life JV with fertiliser co-operative IFFCO, is looking for a local partner to start a life venture.

Tokio Marine Holdings, which basically deals in the field of asset management, investment banking and real estate management. It has been searching for a new partner for life insurance since IFFCO is not interested in getting into the business.

Besides Tokio Marine, Edelweiss has also received feelers from overseas companies like German insurer Ergo, Nippon Life and another Malaysian Life insurer which is keen to enter India, said a senior official in the insurance industry.

It’s learnt that management consultancy firm Ernst & Young is advising Tokio Marine in their India strategy. When contacted, Rashesh Shah, chairman of Edelweiss Capital, refused to comment.

“If they want the advantage of a strong local partner with deep pockets, a well-known brand and a distribution network, they need to accept playing second fiddle in the joint ventures,” he said. There is also a trend of strong partners, particularly banks, seeking a high premium for the 26% stake.

Edelweiss which is basically into investment banking, stock broking, wealth management and asset management. The company is listed in the stock exchange and has a market capitalisation of Rs 3,100 crore. The company has announced a Rs 58 crore of consolidated net profit for the quarter ended June 2009, up 41% from the corresponding quarter last year.

DLF, the country’s largest real estate company, is looking to exit its life insurance joint venture with the US-based Prudential Financial.

The company has not still recovered from the realty crash last year, is now looking for a potential buyer for its 74% stake in DLF Pramerica Life Insurance. It could be the first deal in India’s fledgling insurance industry.

A senior executive in the insurance industry, said DLF wants to exit insurance business it entered in 2007 when the realty boom was at its zenith, as it is hesitant to spend more money on any business that is not its core area of expertise.

DLF-Pramerica, which currently has a capital base of Rs 130 crore, is expecting fresh infusion of Rs 150-200 crore from its parents this fiscal to increase its penetration in the market.

The Tata Group is preparing to buy out US insurer AIG from the life JV, Tata AIG life insurance. The TATA local partner of AIG is believed to doing valuation of the life company.

The issues of TAta buying was raised and came into picture after the global slowdown and AIG suffering losses. The result of which was the bailout by US government and becoming the largest shareholder in AIG.

It was believe that AIG is interested in selling it’s Asian life insurance business. In the beginning of the year US’ Metlife, UK’s Prudential and French insurer Axa had shown interest in buying parts of AIG’s life insurance business. This step could have caused regulatory difficulties in India the reason being, all these companies have JVs in India.

Recently, the US government decided that it would get AIG to repay part of the bailout money by selling shares in its Asian business under AIA, an arm of AIG, through an initial public offer.

When contacted, a Tata spokesperson said: “We do not wish to comment on such speculation.” According to an AIG official, given AIA’s positioning as an Asian insurer, presence in the Indian market would be crucial. Indeed, AIG insiders pointed out that despite the financial crisis, AIG was quick in infusing money into the Indian life insurance JV.

The founding partners of Baring Private Equity Partners India  Rahul Bhasin and Subbu Subramaniam  have decided to split ways, reported  The Economic Times.

The split is taking place due to differences over many issues, reported the paper.

Bhasin is expected to buy out the stake owned by Subramaniam, who is planning to launch another fund, the paper said. However, the settlement process is subject to arbitration as the partners could not reach an amicable settlement, it added.

“Our separation process in under arbitration with respect to the valuation of our respective stakes in the company,” the paper quoted Subramaniam as saying.

“He (Subbu) is no longer with the fund. I wouldn’t like to comment further on employee matters,” Bhasin told the paper.

Baring Private Equity Partners was founded in 1984 with Dutch major ING Group  as the major investor.

In August 2004, the fund’s managers bought out ING. After the buyout, the fund managers running the regional funds acquired ownership of their respective management companies with the right to use the Baring brand, the paper said.

(source:- The Economic Times)