SHRIRAM AND SANLAM ADD NON-LIFE TO THE MIX

Chennai-based Shriram Group and South Africa-based financial services group Sanlam are to enter the Indian non-life sector with a joint venture capitalised at Rps1.05bn ($24.5m). Shriram Group will hold a 74% stake and Sanlam will hold the rest, but Shriram chief executive R Thyagarajan said that his company would have no objection to Sanlam increasing its stake to 49% is the Indian restrictions on foreign direct investment were ever changed. The joint venture, which will be based in Jaipur, is to be launched formally on July 23. It will focus initially on motor, fire and personal accident — aiming for premiums of Rps2bn in its first year of operation. Thyagarajan, ignoring many non-life ventures into the rural sector of India in recent years, claimed that “new entrants into the general insurance business had focused only on getting a share of the existing premium income. No attempt has been made to garner premium by creating new markets for general insurance business”. Shriram already has a life joint venture with Sanlam, which this year was fined Rps500,000 by the Insurance Regulatory & Development Authority because for two years in succession it failed to sell a sufficient number of policies — covering fewer than 6,000 lives compared with the required 7,500.