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| Press Clips |
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| Mitsui of Japan to buy 26%
in Chola insurance firm |
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CHENNAI: Cholamandalam General
Insurance (CGICL) of the Murugappa group has roped in
Mitsui Sumitomo (MS) Insurance as a joint venture partner.
The group offered the Japanese major 26% stake by renouncing
the rights shares.
In the process, a premium of $7m has been realised by
offering
the shares at double the face value, MA Alagappan, vice-chairman
of the Murugappa group and chairman of CGICL, told reporters
on Monday. As a result, the capital base of the company
has risen to Rs 146 crore.
CGICL, which kicked off operations in October last, has
scaled up its business target for this year and is hoping
to tap the Korean and Japanese companies. After Reliance,
Cholamandalam was the only private sector non-life insurer
to start operations without a JV partner. The venture
was capitalised to the tune of Rs 105 crore with Tube
Investments investing 75%, Cholamandalam Investment and
Finance 15%, and other group firms pitching in with the
balance. |
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| He said in the last six months,
the venture had set up 11 offices across India, has introduced
more than 50 products and sold over 2,50,000 policies.
It has also installed a unique, scalable enterprise-wide
IT solution. The JV has so far netted a premium of Rs
15 crore. |
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Mr Alagappan said, “We
will leverage on the strengths of MS in tapping the business
of Japanese and Korean companies in India and the South
East Asian market. Automobile insurance is a large business
for MS and this will benefit the JV.”
Also, the JV is eyeing travel and health insurance, in
which MS is a dominant player. Besides, it will benefit
from the technology of MS for quick claim assessment in
motor insurance. In the eight member board of the JV,
both Murugappa and MS have three directors each and two
independent directors.
Tadao Iso, chief operating officer, Asia division &
MD, MS said it is one of the top four groups in Japan.
Its general insurance business with operations in 36 countries
is billed at $ 10 Billion and assets are valued at $ 50
Billion.
“ We have been looking at the
excellent potential and a growing insurance market in
India. We felt it was not possible to establish world
wide network without a presence in India. Therefore, we
entered India in 1997 and set up liaison offices in Delhi,
Mumbai and Bangalore”.
It selected Cholamandalam for investment as it has a strong
brand equity and had quickly entered the market. “
We will depute four Japanese executives to take care of
Japanese business. We will share our international experience
and know how particularly in new product areas”,
he noted.
Responding to a query, he said MS will help tje JV in
tapping the general insurance business of Japanese and
Korean companies in India estimated to be Rs 45 crore.
Alagappan said the JV is equally bullish on penetrating
into the rural insurance market since the group has a
strong presence in the rural areas with its businesses
like sugar, fertiliser, tea, rubber and coffee plantations.
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