UBI to join Dai-Ichi Bank for India life venture

Union Bank of India will join the proposed life insurance venture between Bank of India (BoI) and Dai-Ichi Mutual Life Insurance of Japan as a third partner.

The public sector bank is likely to hold 23 per cent in the life insurance company. Earlier, Hyderabad-based Andhra Bank was exploring prospects to join Dai-Ichi-BoI combine.

The Memorandum of Understanding (MoU) for the life insurance JV will be inked tomorrow in New Delhi in the presence of Union finance minister P Chidambaram Union Bank official said.

Bank of India is expected to be largest shareholder with stake between 48-51 per cent stake in the venture. Dai-Ichi will hold 26 per cent stake in the venture, keeping with existing cap on ownership of overseas partners in insurance ventures.

Before deciding to tie-up with Dai-Ichi-BoI alliance, Union Bank had held preliminary discussions with Italy's largest insurer Generali, The Ergo Insurance Group of Germany and Bharti Axa life Insurance company.

India's life insurance companies collected premiums stand at $23 billion in the year ended March 31, 2006, 16 per cent higher than the year earlier, C.S. Rao, chairman of the Insurance Regulatory and Development Authority, said in October.

The annual growth in the coming years may be as much as 24 per cent, he said.