BoB in talks with Socgen, Munich Re for life JV

Bank of Baroda is discussions with three European insurance and financial group - Munich Re, Societe Generale (SocGen) and Legal & General - to form a life insurance joint venture. The bank expects to firm up the venture in this month.

More than six foreign insurance players, including one from Japan, made presentations, and the bank is most likely to zero in on an European insurer, banking sources said.

Earlier, BoB had held talks with Nippon Life, another Japanese insurance major. However, talks did not move further owing to regulatory issues in Japan.

At present, the government has put 26 per cent ceiling on foreign investment in insurance ventures. The Reserve Bank of India has indicated that it does not favour Indian banks holding 74 per cent stake in insurance venture. Hence, BoB is likely to rope Indian entity, possibly a corporate, to pick up stake in the venture.

Munich Re Group, one of the world's largest reinsurer and primary insurer in Germany, has held discussions, sources said. Its primary insurer business includes the ERGO Insurance Group. Plus it has a asset management arm Meag Munich Ergo Asset Managament (MEAG) with the assets under the management at Euro 159.9 billion as on December 31, 2005.

At present, Bank of Baroda has a bancassurance tie-up with HDFC Standard Life. The bank is looking at increasing the fee-based income through distribution of financial products such as insurance policies and mutual funds.

Another player which has made pitch for JV is SocGen, a leading financial group in Europe with roots in France. Besides insurance products, it is also active in investment banking and asset management business. It already has a commercial banking in India.

SocGen also holds stake 37 per cent stake in SBI Fund Management company. It also has acquired a 75 per cent stake in Appeejay Finance, a Kolkata-based non-banking finance company. Legal & General, the UK-based financial group, has also made presentation.