4 insurers wooing Union Bank

Union Bank of India is being chased by four new life insurance companies to make the Mumbai-based bank a shareholder in their ventures.

Italy's largest insurer Generali, Japan's Dai-Ichi Mutual Life Insurance, which has tied up with Bank of India, Germany's second largest primary insurer The Ergo Insurance Group, and interestingly, Bharti Axa life insurance company, which commenced operations in August, have already made presentations to Union Bank.

Bharti Axa life is a joint venture between Bharti Enterprises (74 per cent) and Axa Asia Pacific Holdings (26 per cent). Bharti Enterprises will have to sell a part of its stake as and when it finds a third partner for the life insurance venture.

Experts say that roping in a bank makes more sense for Bharti Axa as it will help get a committed partner with a wide reach for selling the products.

Tinesh Menon, marketing manager at Bharti Axa and the company's spokesperson, said, "We can't comment on it (efforts at getting Union Bank as a joint venture partner) as of now."

Union Bank officials confirmed that they have been approached by these insurers and said the public sector bank was interested in having 23-26 per cent equity stake in a life insurance company.

Italian insurer Generali has tied up with Pantaloon Retail to set up life and non-life insurance companies. The proposed companies will be called Future Generali.

According to present plans, Generali will own 26 per cent and Pantaloon Retail 74 per cent. The holding of the Indian partner will reduce after a third partner joins.

Kishore Biyani, chief executive of the Future Group that owns Pantaloon, when asked if Future Generali was in talks with any other other bank, said, "Our job is to talk as we are in business." He, however, declined to provide any details.

Japanese insurer Dai-Ichi Mutual Life Insurance is entering life insurance business with Bank of India (BoI) and its search is on for a third partner. Earlier Andhra Bank, another public sector bank, had shown interest in joining, but subsequently backed out. BoI will have a stake between 30 and 51 per cent.

If Union Bank ties up with DaiIchi-BoI combine, then it will be an extension of alliance that BoI and Union Bank have for loan syndication, international banking and sharing of training infrastructure.

Alexander Becker, head of investor relations and corporate communication of Ergo Insurance Group, in an email response said, "ERGO is interested in setting up a joint venture in India in the life and in the property and casualty business. We have conducted feasibility studies, identified customer and product segments and the preferred operating model for ensuring efficient customer service. We will commence in-depth talks with prospective partners in the next weeks. I am sure that you will understand that we do not comment on names of the prospective partners or on amounts to be invested at the moment."