Anil-controlled AMP Sanmar new force on insurance turf

Mumbai, July 31 | Updated: Aug 1 2005, 05:50am hrs
The insurance sector is keenly watching the developments on Reliance Life Insurance Company Ltd taking over the AMP Sanmar Life Insurance. It was expected and would be a good deal for both the buyer and seller, said the managing director of a life insurance company. Reliance Life Insurance Company Ltd is a subsidiary of Anil Ambani-led Reliance Capital Ltd (RCL).

Sources said getting buyers for AMP Sanmar wouldnt have been easy as no existing life insurance player would have got that kind of capital to acquire the company. Besides, no foreign company which wants to enter the Indian life insurance sector can buy it, as a foreign company can only invest upto 26% in the domestic insurance sector.

Observers point out that the Anil Ambani-controlled AMP Sanmar will be a company to watch out for. Going by their overall strategy, they will be very aggressive as they want to be among the top three life insurance companies in a year or two. We expect large-scale poaching from among the life insurance companies, said the chief of another life insurance company.

Recently, Insurance Regulatory Development Authority (Irda) had cancelled the life insurance licence of Reliance Life Insurance (then part of the undivided Reliance Group) as the company had not used it for over three years, failing to start operations. However, laying fresh emphasis on insurance after the separation in the Reliance group, the RCL has quickly taken the initiative to enter the life insurance sector as part of its plans of turning itself into a financial conglomerate.

Reliance Life is expected to follow the earlier strategy of the undivided Reliance group of creating a synergy between its insurance and infocomm businesses.

RCL already has a subsidiary, Reliance General Insurance Co Ltd, which is amongst the leading players in the country in the non-life insurance business. AMP Sanmar Life Insurance, jointly owned by AMP of Australia and Sanmar Group, has over 90 offices across the country, over 9,000 agents and 900 employees, and is currently headquartered in Chennai. Reliance Capital Ltd, part of the Anil Dhirubhai Ambani Enterprises, is one of Indias leading financial services companies, with interests in asset management and mutual funds, stock broking, insurance and related activities.

Upon completion of its ongoing equity infusion, RCL will have a net worth of nearly Rs 4,500 crore, ranking it amongst the top three banking and financial services companies in the country in the private sector. Reliance Mutual Fund, sponsored by RCL, is amongst the countrys leading mutual funds, and has assets under management of over Rs 10,000 crore.