AMP open to exiting life JV with Sanmar

AMP, the Australia-based insurer and fund manager, is willing to exit its Indian venture, AMP Sanmar Life Insurance Company, if the price is right. This assumes significance in light of AMP having demerged its loss-making UK operations last year into a separate entity, Henderson.

AMP Sanmar managing director Graham Meyer said: "If we get a good price (for our stake), we might sell out. After all, we have a duty to our shareholders." He was, however, quick to add that AMP Sanmar is not at this point soliciting or seeking a selloff.

Last year it was widely rumoured in the industry that AMP Sanmar was up for sale. AMP Sanmar is a 74:26 joint venture with the south-based Sanmar group, where the Australian insurance giant, holds 26 per cent stake.

Rumours of a selloff followed AMP's decision to demerge into two businesses along geographic lines - Australasia and the UK. S V Mony, vice-chairman AMP Sanmar said, "This means we will now be part of a more focussed and dynamic Australasian business."

On AMP's exit from UK, Meyer said as the company was not successful in making the business profitable in the UK, and was a drain on its capital, it decided to demerge the two arms.

Meyer said: "AMP just put in $ 100 million into the India Infrastructure Fund, jointly set up with Asia Development Bank. This gives indication of our commitment to India."

Further reaffirming his stance, Meyer who took up the position as managing director late last year, said: "I'm here on a three-year contract. I do not take jobs to shut down things." "There is plenty of room for everyone in India, which is a growing market and will be profitable as we see it growing faster than expected," said Meyer.

Taking charge of the domestic operations, the new managing director's first priority is to review AMP Sanmar's operations. "This has proved necessary since the industry has changed in terms of size, dimension and product. There is no point in taking a three-year view," he said.

The critical question today is whether AMP Sanmar can operate pan-India or rather a regional player.

"We will need to infuse another Rs 35-40 crore capital by late 2004 as we target a premium income of Rs 120 crore for fiscal 2005," said Meyer.

This will be in addition to the Rs 35 crore infused into the joint ventire earlier this year in order to step up the pace of growth in terms of branch expansion to 72 by August end and strengthening its agency force to 9,000 by December.

AMP Sanmar today is focused on south India, where it intends to have a presence in all the B and C class towns by August this year. It will also look at expanding its presence in Mumbai, and other parts of Maharashtra as well as Gujarat.