South African firm wants slice of Indian insurance pieSeptember 16th, 2008 - 3:48 pm ICT by IANS
Johannesburg, Sep 16 (IANS) South African financial services giant Sanlam wants a stake in India’s rapidly growing insurance market, Sanlam Investments chief executive officer Johan van der Merwe was quoted as saying by the Afrikaans daily Beeld Tuesday.Van der Merwe was speaking in the wake of an announcement Monday that Sanlam Investments had entered into a joint venture with India’s fourth-largest securities broking house, the SMC Group.
“There are 1.2 billion people in India (and) the growth potential is enormous,” Van der Merwe said.
Sanlam Investments will contribute $22.5 million to the venture with SMC.
Van der Mere said SMC had 1,350 branches in 300 cities and about 500,000 clients.
“I don’t think that Sanlam could have stood on its own legs (in India) and SMC will distribute our unit trust products.
“The SMC retail client base grew by between 30 percent and 45 percent in the past three to five years. We want part of that growth.”
Sanlam spoke to more than 30 companies in India similar to SMC, sometimes twice to the same one, before deciding on SMC as its partner.
The biggest risk, according to Van der Merwe, is to manage the people who will be driving the partnership. “The greatest risk would thus have been choosing the wrong partner,” he said.
Employees of both Sanlam in South Africa and SMC in India will undertake mutual reciprocal training across the Indian Ocean.
“Sanjay Gupta, manager for developing markets, will manage the partnership, (as) he has extensive experience with identifying opportunities in Africa,” Van der Merwe said.
Sanlam had decided on India after also looking at other developing markets such as China, Russia and Brazil.
“The fact that India uses English (like us), made a huge difference. In addition, India is also a democracy and uses the same judicial system as South Africa, where Sanlam is well-versed with it.”
Tags: 5 million, afrikaans, beeld, chief executive officer, china russia, companies in india, financial services giant, indian insurance, indian ocean, insurance market, johan van, johannesburg, joint venture, judicial system, retail client base, sanjay gupta, sanlam, smc, unit trust products, van der merwe