'Hiking FDI in insurance in India's interest'

There is a need to educate politicians about the merits of increasing foreign direct investment (FDI) in the insurance sector, managing director of AMP Sanmar Life Insurance Company, Graham Meyer, said.

Addressing a press conference here along with AMP Sanmar's brand ambassador Steve Waugh, Meyer said it was in India's interests that it hikes the FDI limit in insurance.

"Insurance is a much more capital intensive industry than even manufacturing. You need to put in more capital to enable the industry to grow. An enhanced FDI will also help in the development of the country," he pointed out.

At present, the FDI in insurance is capped at 26 per cent. Finance Minister P Chidambaram had proposed to raise it to 49 per cent but the proposal is in limbo due to the stiff resistance, especially from the Left parties.

Meyer said Indian politicians should understand the benefits of an FDI hike. "If one looks from the development point of view, I think more FDI must be encourage," he said.

AMP Sanmar, which started its operations in March 2002, has insured 1.65 lakh lives so far and collected a premium income of Rs 73 crore. It expects these to grow to 2.50 lakh lives and Rs 115 crore by the end of the current fiscal. The company is projecting a 300 per cent growth in premium income to Rs 250 crore by the end of the next fiscal, he said.

At present, AMP Sanmar has 6,700 life advisors and 71 branches. However, the company has a presence only in Tamil Nadu, Kerala, Andhra Pradesh, Karnataka, Maharashtra and Gujarat.

Meyer said that the company was moving very carefully in expanding its operations. "We want to be very focussed in the area we are in. After we have established ourselves in that area, we move to another area. We want to build from the bottom and are planning our expansion drive very carefully," he said.

It is due to this plan that AMP Sanmar is the only private insurer to have a presence in all districts in the south, he said.

Graham described Nagpur and the surrounding areas as a "rich' region having good growth potential. The company, therefore, will be opening branches in Akola and Chandrapur in January 2005, he said. New branches are also being opened in Ahmednagar, Jalgaon and Solapur. At present, AMP Sanmar has seven branches in Maharashtra.

Recently, in a first of its kind tie-up, AMP Sanmar signed an agreement with general insurer New India Assurance to cross-sell each other's products. The company will be launching tailor-made co-branded products in association with New India, he said.

AMP Sanmar is a 26:74 joint venture between AMP, Australia's leading financial services company, and the Chennai-based Sanmar group.

Australian cricket icon Steve Waugh was in the city as part of a tour organised by the company to support its robust growth projection, Meyer said. After Nagpur, Waugh will be travelling to Vijayawada, Hubli, Calicut, Trichy and Thiruvananthapuram.

Waugh met the company's top performing life advisors, employees and customers and also school children who had won the 'Meet with Steve' contest. Describing his association with AMP Sanmar as an opportunity to "build on the many friendships I have here", Waugh said he has enjoyed being the company's brand ambassador since the last three years.