Australian firm in fray for HDFC Chubb stake

Australia-based Insurance Australia Group (IAG) is in advanced talks to buy a 26 per cent stake in HDFC Chubb General Insurance, following the buyout of Chubb's stake by HDFC.

Sources said the two other strong contenders were Germany-based Ergo, part of the Munich Re Group, and US-based Travelers.

"We are still examining the proposals. It is too early to say anything now," said a HDFC executive, when contacted.

IAG, which operates in Australia, New Zealand, Asia and the UK, underwrites more than $7.5 billion of insurance premiums each year. The group insures more than $900 billion worth of property.

The group's net assets were $4,517 million on December 31, 2006. Last year, IAG had acquired leading motor insurance broker Hastings Business and Equity Insurance Group of Europe.

This May, HDFC bought out Chubb Global Financial Services Corporation of the US. HDFC ended its joint venture with Chubb Corporation following differences over the style of running the business and risk appetites. The buyout price was not disclosed. The joint venture's capital is currently Rs 125 crore.

HDFC Chairman Deepak Parekh had said earlier that he expected to receive a premium for the 26 per cent stake in HDFC Chubb. He had also said HDFC had been allowed to use the HDFC Chubb name for two months. The corporation said it expected to have a partner before the renaming.