Shriram General Insurance has become the first private insurer to make a foreign acquisition with the purchase of a large chunk ofshare in Philippine non-life company Monarch Insurance. This is the first overseas insurance transaction after the insurance regulator in May 2013 allowed domestic companies to do business in other countries. The Shriram Group earlier held a stake in the Philippine company through Bharath Investments a Singapore-based holding company, which has investments from Ceylinco group – a Sri Lankan conglomerate. “The group earlier held a stake in Monarch through Bharat Investments.
We had planned to infuse Rs 35 crore to meet capital requirements, of which Rs 10 crore was already invested. The remaining Rs 25 crore has been invested by Shriram General Insurance after due approval from IRDA,” said G S Sundararajan, group director, Shriram Group.
The group had picked up a 40% stake in Monarch in June 2007 for a consideration of about Rs 7 crore. According to sources, the promoters had brought in representatives on the board. Monarch’s website describes the company as a 50-year-old Philippine SEC registered and Insurance Commission licenced non-life insurance company. In May this year, the Insurance Regulatory and Development Authority had said that Indian insurance companies can set up businesses abroad if they meet certain conditions. The guidelines required that life insurance companies have a net worth of Rs 500 crore and non-life companies a net worth of at least Rs 250 crore before making overseas investments. It also said that the companies with global ambitions should have a three-year profit track record.
Shriram Capital. The company has reported a premium income of Rs 347 crore in the first quarter. The company has also been consistently reporting profits.
Source: The Times of India
Date: 11th October 2012