Swiss Re, Munich Re in talks with SBI for JV

The UK-based Lloyd's, the world's leading provider of specialist insurance services, and leading global reinsurers, Germany's Munich Re Group and Switzerland's Swiss Re, are in talks with the State Bank of India (SBI), the country's largest bank, for partnering in its general insurance foray. The partner is likely to be finalised in the next two months.

A senior SBI official said, "We will be partnering with a foreign reinsurer for our non-life insurance business and discussions are currently on with the world's leading reinsurers."

The bank is in the process of appointing an advisor to zero in on a foreign partner, according to sources within. The plans for venturing into general insurance come at a time when the bank is planning to hive off stakes in its life insurance and asset management companies to a separate holding company. 

INDUSTRY NUMBERS Gross premium underwritten
Insurer Rs crore	Premium 2006-07	Y-oY % change
Royal Sundaram	600.03	30.63
Tata-AIG	741.56	21.09
Reliance General	912.23	461.96
IFFCO-Tokio	1,150.32	28.37
ICICI-Lombard	3,003.45	88.66
Bajaj Allianz	1,804.60	40.48
HDFC CHUBB	190.16	-7.59
Cholamandalam	314.59	41.57
New India	5,024.15	4.86
National	3,810.88	8.15
United India	3,509.95	11.26
Oriental	3,940.53	11.72

SBI holds 74 per cent stake in its life insurance venture, with Cardif SA of France owning the rest. The life insurance venture would require incremental capital of Rs 600 crore every year.

"The general insurance business requires less capital. In the first year, an infusion of around Rs 200 crore may be needed. The incremental capital requirement would depend on how the business grows", according to an SBI official.

Lloyd's reported a profit of £ 3,662 million in 2006 and has a capacity to write business worth about £16.1 billion in 2007. It has insured more than 92 per cent of FTSE 100 companies and 93 per cent of Dow Jones companies.

The insurer covers the world's most complex and specialist risks, from oil rigs to celebrity body parts, and from major airlines to the biggest banks and sporting events.

Munich Re, the second largest primary insurer in Germany, wrote gross premiums of ¤ 37.4 billion in 2006.

Swiss Re, which acquired GE Insurance Solutions, reported a net income of swiss francs 4.6 billion in 2006. Its income from life and health business stood at swiss francs 1.7 billion during the period.