Bharti, AXA in insurance pact

Rs 500-cr venture to foray into pension, mutual funds.

The Sunil Bharti Mittal-controlled Bharti Enterprises announced its foray into the financial sector in partnership with AXA, the world's largest insurance group.

Bharti AXA Life Insurance, a 74:26 joint venture between the Indian and the French group, has committed investments of Rs 500 crore to its insurance venture over the next three to four years.

Bharti and AXA also plan to jointly enter the pension and mutual fund businesses in the coming months.

The AXA group intended to enter the general insurance business as well, though its plans were at a preliminary stage, Les Owen, group chief executive, AXA Asia Pacific Holdings, said at a press conference here.

Bharti Enterprises has signed the joint venture agreement with AXA Asia-Pacific Holdings, a 51 per cent subsidiary of the AXA group, for life insurance. The company will approach the Insurance Regulatory & Development Authority for a licence.

The company is expected to have an initial paid-up capital of Rs 100 crore and hopes to commence operations in the first half of 2006.

"Over the next 15-20 years, we see India as the largest market for life insurance and that makes it one of the most attractive emerging markets for insurance and pension," Owen said.

Bharti Enterprises Chairman Sunil Mittal said the company hoped to target Airtel's seven million customers to offer insurance products. "The insurance business is one of the customer-centric businesses identified by Bharti where it can deliver significant value," Mittal said.

Owen added that the insurance company also planned to tie up with banks to have a nation-wide distribution network.

AXA already has a presence in India through its BPO outfit AXA Financial Services, operating out of Bangalore and Pune, and has plans to ramp up its operations. The AXA group commenced operations in France over 20 years ago. It has over 50 million customers and employs over 1,17,000 people in more than 50 countries.

For Bharti, the largest private sector player in the telecom arena, the insurance foray is its latest diversification attempt.

It has already tied up with the EL Rothschild group-owned ELRO Holdings India Ltd to export fresh agriculture products to Europe and the US. Bharti is also part of a consortium along with Changi Airport and DLF that has bid for the modernisation of the Delhi and Mumbai airports.