Allianz Sees Indian Insurance Market Poised For A Churn

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Munich, March 27: : The Indian insurance regulator, N Rangachary, better be prepared. The two-year old liberalised insurance market with 21 private and five public sector companies is in for a churn.

Confirming the Indian insurance market’s readiness for striking merger and acquisition deals shortly after it has been liberalised, Mr Heinz Dollberg, executive vice-president, Asia-Pacific, Allianz, said the company has got first-hand offers for acquisitions of other insurance companies recently.

"We have already got offers from other Indian private insurers for a takeover,’’ Mr Dollberg told FE. Mr Dollberg, however, refused to name the companies.

Germany’s largest insurer Allianz has both life and non-life insurance operations in India with a joint venture partnership with Indian auto major Bajaj Auto.

However Allianz, though very much keen to expand its operations in India through takeovers, did not show any interest in any of the takeover offers in hand as it did not meet the company’s criteria for this purpose. "I must tell you, they were not good buys for my company," affirmed Mr Dollberg.

Allianz is definitely looking for takeover targets to expand its domestic operation, but with value which can give higher income and profit and can be acquired at lower cost. Allianz had received in all 77 offers of takeovers from its Asian operation during 2002-03.

"I would not be interested in Life Insurance Corporation (LIC) as it is beset with problems and would not be a profitable one," he said, adding that the global philosophy of the company is to be more particular about profit than market share and ranking in any market.

On Allianz’s plan to raise its stake in the Indian operations from 26 to 49 per cent, Mr Dollberg said his company will do it immediately after the government allows such a hike.

"We will bring in more capital to strengthen our Indian operations and believe that with a stake of 49 or 51 per cent, we will have a better control over our operations in Indian market," he observed.

According Mr Dollberg, Allianz may enter into asset management business in India in future. "Asset management is definitely a part of our long-term consideration," he said.

The German financial conglomerate, which has incurred losses to the tune of over $1.2 billion in 2002-2003, has remained bullish on its Asia-Pacific operation, including India.