HDFC to decide on Chubb risk JV in two months

Housing Development Finance Corp (HDFC) would decide on the fate of HDFC Chubb General Insurance company, a joint venture with Chubb Corporation, in two months, Deepak Parekh, chairman of HDFC, said today.

HDFC recently expressed its intention to end its joint venture with Chubb Corporation following differences over style of running business. The non-life insurance company has also seen exodus of people at senior positions.

In the four-year-old company, HDFC holds 74 per cent stake, while the US-based insurance major holds the remaining 26 per cent.

"There are differences between two partners on the business model for the insurance company and we are discussing the future role but at present it is business as usual", Parekh told reporters here today.

The bone of contention is the different risk appetites of the two partners. HDFC is one of the top players in all its businesses - home loan, banking and asset management - has lagged behind in its general insurance business owing to Chubb's low appetite for risk in the Indian market, sources said.

Worldover Chubb runs its businesses with 100 per cent ownership and it is only in India that American insurer has joint venture for insurance business.

On the high attrition rate at HDFC Chubb against the backdrop of the differences of opinion between the two partners, Parekh said: "There has been an attrition as people don't like uncertainties. Also many of our people have joined our competitors."

HDFC Chubb has a market share of 0.64 per cent in non-life insurance business. It offers two main streams of insurance products and services - commercial insurance and specialty insurance.

In the commercial insurance portfolio, the company plans to launch products covering broad spectrum of the main commercial classes of property, marine and casualty classes of business.