Tata open to 49% AIG stake in risk venture

Tatas are open to divesting their stake in favour of the American International Group (AIG) to a maximum of 49 per cent in Tata AIG General Insurance Company Ltd (TAGICL) as and when it would be allowed.

"AIG holds 26 per cent in the company "" the maximum possible under the present structure, while the Tata group holds another 74 per cent. Tata's are open to offering a maximum of 49 per cent and keep the management stake with itself," explained Dalip Verma, managing director, TAGICL in Kolkata today.

"The government has increased cap on the banking sector, and the mutual fund industry. It is a matter of time before the center enhances foreign direct investment (FDI) cap in the insurance sector," explained Verma.

Sources in the insurance industry said that the government was likely to consider the issue of enhancing the cap on foreign holding in insurance companies to 49 per cent after the elections.

AIG was also understood to be keen on increasing its stake to the maximum extent "" 49 per cent in this case. In a parallel development, Verma said that the company was expecting a Rs 3560 crore premium income for the whole of 2003-04 against Rs 241 crore achieved in the previous year.

"For the first eight months. we have clocked a premium income figure of Rs 270 crore. At present TAGICL has cornered around 18 per cent of the market share among the private sector non-life insurers. Overall market share of TAGICL stands at 2.3 per cent.

The company is also on expansion mode - it has firmed up plans of enhancing its presence in 12 more locations in the next 12 month period. At present it has 14 offices in 11 cities. It is also in talks with three vehicle manufacturer for a tie-up.

"We already have a tie-up with HSBC and are talking to four more banks for selling our products through them," Verma said.