IAG wins Indian JV
Beleaguered insurance giant IAG’s generally troubled entry into foreign markets has taken a positive turn with a deal to set up a joint venture with the State Bank of India (SBI).
IAG beat a number of major global insurers to seal the deal as preferred partner with India’s biggest bank, which has more than 100 million customers and 10,000 branches across the country.
The two companies have signed a non-binding agreement to form a joint venture in India later this year, and pending Government approval will start writing business next year.
The Australian insurer will take a 26% stake in the joint venture, the maximum allowed under current Indian foreign direct investment regulations.
The terms are yet to be finalised but CEO Mike Hawker says IAG plans to fund the joint venture using internal resources.
He says the partnership is a significant step in IAG’s Asia expansion strategy. “We identified India four years ago as a market we wanted to enter as part of our stated strategy to diversify into fast growing general insurance markets in Asia, and we’ve been discussing opportunities with SBI for more than 18 months.”
Mr Hawker says the Indian general insurance sector has grown at an annual rate of 14% over the past five years and is predicted to grow 15-20% each year for the next 10 years.
IAG beat a number of major global insurers to seal the deal as preferred partner with India’s biggest bank, which has more than 100 million customers and 10,000 branches across the country.
The two companies have signed a non-binding agreement to form a joint venture in India later this year, and pending Government approval will start writing business next year.
The Australian insurer will take a 26% stake in the joint venture, the maximum allowed under current Indian foreign direct investment regulations.
The terms are yet to be finalised but CEO Mike Hawker says IAG plans to fund the joint venture using internal resources.
He says the partnership is a significant step in IAG’s Asia expansion strategy. “We identified India four years ago as a market we wanted to enter as part of our stated strategy to diversify into fast growing general insurance markets in Asia, and we’ve been discussing opportunities with SBI for more than 18 months.”
Mr Hawker says the Indian general insurance sector has grown at an annual rate of 14% over the past five years and is predicted to grow 15-20% each year for the next 10 years.