Munich Re keen on India ventures

Group company Ergo in talks with potential partners

Munich Re Group, the world’s second-biggest reinsurer, hopes to capitalise on the growth opportunities in India. With its group company Ergo International AG, it is looking for joint venture partners in the life and non-life business.

Addressing a press conference here on Thursday, Dr Nikolaus von Bomhard, said, “Ergo is currently involved in promising talks with potential partners. We welcome joint ventures with banks or any other companies operating in other lines of business as long as they have a strong brand name and presence across the country.”

Munich Re wants its future India joint ventures to be among the top five in their segment within a time frame of five to ten years after their launch, and forecast double-digit growth in the country.

MoU by year-end
The company said that it was close to finalising memorandums of understanding (MoU) with partners in the life and non-life business and expects at least one of the MoUs to be signed by the end of the year. “Looking at the way things are moving, we expect to sign the non-life business before the life business. But then things might change as we move ahead,” Mr von Bomhard said.

Regarding reinsurance, Mr von Bomhard said that the Indian market continues to be heavily regulated with the State-owned re-insurer occupying ‘a quasi-monopolistic position’.

“As soon as legal circumstances permit, we will establish a reinsurance base in India,” he added.

Market potential
According to estimates, the insurance market in the country is expected to grow five-fold to €100 billion ($138 billion) in 10 years’ time, bolstered by strong economic growth and a burgeoning middle class already numbering 300 million people.

Munich Re this week raised its 2007 earnings target range to €3.5-3.8 billion from €3-3.2 billion previously, partly on expectations of a lower tax burden, after delivering stronger-than-expected second quarter earnings.

Source: The Hindu Business Line