Dutch insurance major, AEGON has re-iterated that the company is committed to the insurance joint venture in India, AEGON Religare, and the Indian insurance market. Nor is it planning to exit the Indian market or its joint venture.
AEGON’s chairman and chief executive officer (Asia) Douglas Henck said that India was of strategic importance to the company and was a country that had attractive growth opportunities for the future.
“Favourable demographics and income profile will continue to drive growth (e.g. growing middle class, growing urbanisation, rising income levels, favourable age profile, low insurance penetration, and increasing awareness),” he said in a statement issued in response to a Business Standard report published on Tuesday (AEGON may exit Religare venture).
Henck further added, “Together with our partners in India we continue to build a successful venture towards becoming a leader in our chosen markets by 2015 – not necessarily the biggest, but the "most recommended" among our customers, employees and distributors, as well as the "most respected" insurer in wider society”.
The Business Standard report had stated AEGON may exit its Indian joint venture with Religare and was looking at all options including the exit option based on the information provided by sources with direct knowledge of the developments in the insurance joint venture.
Explaining the current situation, these sources said further that Religare, which has 44 per cent stake in AEGON Religare, had already exhausted the Rs 440 crore capital commitment in the JV and was not in favour of investing any further in it. When contacted, Religare said, "this pertains to the JV agreement between partners and as a policy we do not like to comment on such matters in the public domain."
In view of the clarification from AEGON's Chairman and CEO-Asia, Business Standard stands corrected.
AEGON holds 26 per cent stake in the Mumbai-based AEGON Religare Life Insurance (ARLI), established in 2007. Religare holds 44 per cent in the JV with Bennett, Coleman & Company Limited (BCCL) holding the remaining 30 per cent equity in the venture.
According to the company website, as on December 31, 2012, the promoters have invested Rs 1,075 crore in the insurance company.
Standing at the bottom five out of 23 life insurance players in the India, AEGON Religare collected Rs 207.65 crore by writing new policies during 2011-12, which was down by 24.5 per cent as against Rs 274.86 crore in 2010-11.