1 week Ago By Bloomberg News
(Bloomberg) — Allianz SE is in talks to scrap two Indian joint ventures with Bajaj Finserv Ltd., in a dispute over the direction of the partnership, according to people familiar with the matter. Allianz plans to exit Bajaj Allianz Life Insurance Co.
and Bajaj Allianz General Insurance Co. because its Indian partner isn’t allowing the German insurer to raise its stakes at a discounted price, the people said, asking not to be identified as the information isn’t public. It also isn’t given a say in strategic decisions, they said.
While the differences between the companies have been simmering for years, the latest impasse has brought the joint ventures to the brink of collapse after more than two decades. Allianz is instead looking to now buy stakes in newly established insurance firms to retain a presence in the fast-growing South Asian country, two of the people said, without providing further details. Bajaj holds a 74% stake in the joint ventures with Allianz.
Allianz doesn’t comment on market rumors, a Munich-based spokesperson said. A spokesperson for Bajaj Finserv declined to comment while those for the insurance joint ventures didn’t respond to requests for comment. No final decision on ending the partnership has been taken yet, and both companies may still find a way to work together, the people said.
India’s insurance penetration rate — the ratio of premiums to gross domestic product — is less than half that of countries such as South Africa and Canada, implying strong growth prospects for the sector, insurance regulator data show. The Bajaj Allianz general insurer is the third-largest in the country by gross written premiums, while the Bajaj Allianz life insurer is one of the fastest-growing with assets under management of 1 trillion rupees ($11.9 billion) as of March 31, according to exchange filings.
—With assistance from Preeti Singh..
