State Bank of India selects IAG as preferred partner to enter general insurance joint venture in India

Transcription

1 MEDIA RELEASE 13 MAY 2008 State Bank f India selects IAG as preferred partner t enter general insurance jint venture in India State Bank f India (SBI) and Insurance Australia Grup Limited (IAG) annunced tday they had signed a nn-binding agreement t enter int exclusive negtiatins t frm a general insurance jint venture in India later this year. Mr Deepak Chawla, Deputy Managing Directr in charge f Crprate Strategy and New Business initiatives f SBI said: Establishing a general insurance jint venture is a key element f SBI s strategy t pursue emerging, high grwth pprtunities t build n ur psitin as the pre-eminent financial services grup in India, DMD Chawla said. IAG s prven capabilities in technical and underwriting expertise, pricing and risk management, and its track-recrd in wrking successfully with ther partners in the Asian regin, makes IAG an ideal partner. We lk frward t wrking tgether t grw a successful general insurance business. IAG Chief Executive Officer Michael Hawker said he was pleased IAG had been selected as SBI s preferred partner ahead f a number f majr internatinal insurers. Frming a general insurance partnership in India with a premier partner such as SBI, the largest bank in the cuntry, is a significant step in IAG s Asian expansin strategy, Mr Hawker said. SBI is the leader in the Indian banking sectr, with ver 100 millin custmers and 10,000+ branches acrss the cuntry, ne f the mst trusted brands in India, and a heritage dating back ver 200 years. A jint venture with SBI wuld allw us t cmbine ur cre capabilities with the lcal knwledge and distributin netwrk f ne f the largest and mst recgnised financial services rganisatins in India. We identified India fur years ag as a market we wanted t enter as part f ur stated strategy t diversify int fast grwing general insurance markets in Asia, and we ve been discussing pprtunities with SBI fr mre than 18 mnths. India has a large, high grwth ecnmy. Its general insurance sectr has grwn at a cmpund annual grwth rate f 14% ver the last five years, and is predicted t grw 15%-20% per annum ver the next ten years, Mr Hawker said. SBI has successfully built jint venture relatinships with ther freign partners, including a life insurance business which nw has a prfitable number three market psitin in terms f new business incme. It als has a track recrd f distributing general insurance prducts underwritten by a third party. The terms f the jint venture are yet t be finalised. Once a binding agreement is signed, it will be subject t Insurance Regulatry and Develpment Authrity and ther applicable apprvals. Once apprvals are granted, the jint venture is expected t cmmence writing business in IAG intends t fund the jint venture using internal resurces which will nt be at a material level in the cntext f the Grup. Mre details abut the jint venture will be annunced nce a binding agreement is signed. Page 1 f 2

2 Abut State Bank f India State Bank f India is the largest cmmercial bank in India, with ver 100 millin custmers and 10,000+ branches acrss the cuntry, ne f the mst trusted brands in India, and a heritage dating back ver 200 years. Fr further infrmatin please visit Abut Insurance Australia Grup Insurance Australia Grup Limited (IAG) is an internatinal general insurance grup, with peratins in Australia, New Zealand, the United Kingdm and Asia. Its current businesses underwrite mre than $7.5 billin f premium per annum. It emplys mre than 16,000 peple f which arund 11,000 are in Australia. It sells insurance under many leading brands including NRMA Insurance, CGU, SGIO, SGIC and Swann (Australia); NZI and State (NZ); Equity Red Star and Hastings Direct (UK); and NZI and Safety (Thailand). Fr further infrmatin please visit A fact sheet with further details is attached separately. - ends - Insurance Australia Grup CORPORATE AFFAIRS Emma Fster T M E emma.fster@iag.cm.au INVESTOR RELATIONS Michael Wds T M E michael.wds@iag.cm.au Insurance Australia Grup Limited ABN Gerge Street Sydney NSW 2000 Australia T +61 (0) Page 2 f 2

3 FACT SHEET 13 MAY 2008 Abut State Bank f India Overview State Bank f India is the largest bank in the cuntry by a significant margin. State Bank f India hlds a 15% share f the market in terms f bth depsits and advances. Fr the year ended 31 March 2008 (FY08) depsits and advances were A$141 billin 1 and A$111 billin respectively. #1 Market Share fr Advances (FY08) #1 Market Share fr Depsits (FY08) SBI, 15.28% SBI, 15.44% Others, 84.72% Others, 84.56% The Gvernment f India hlds 59.7% f State Bank f India s shares (30 June 2007). State Bank f India is listed n the Bmbay Stck Exchange and its Glbal Depsitary Receipts are traded internatinally. State Bank f India is included in Frtune's Glbal 500 and is the nly Indian bank t feature in the Tp 60 Wrld Cmmercial and Savings Banks within that ranking (2007). Custmer base State Bank f India: has ver 100 millin custmers, with a further 46 millin custmers when including the State Bank Grup s whlly and majrity wned subsidiaries. has a diversified custmer base that spans crprates, retail and rural/agriculture, prviding access t ptential insurance custmers acrss all f these segments. has a relatinship with ver 80% f large and 50% f mid-size crprates in India. is the largest prvider f infrastructure debt and arranger f external cmmercial brrwings in India. 1 All A$ figures based n A$/US$ exchange rate f 0.95 and A$/Rs exchange rate f 38 Page 1 f 4

4 Lan Bk Cmpsitin (FY08) SME 19% Agriculture 10% Internatinal 14% Distributin netwrk Retail 21% Mid Crprates 26% Large Crprates 10% State Bank f India s distributin netwrk: includes ver 10,000 branches, with a further 5,000 branches when the State Bank Grup s whlly and majrity wned subsidiaries are included. spans all Indian states, prviding the gegraphic reach required in a cuntry f India s size. is supprted by call centres and internet capability. State Bank f India Branch Netwrk Punjab (273) Haryana (203) Chandigarh (36) Delhi (221) Rajasthan (212) Gujarat, Diu, Daman and Dadar & Nagar Haveli (520) Maharashtra/Ga (901) Karnataka (360) Jammu & Kashmir (137) MP (521) Himachal (162) Uttar Pradesh/ Uttarakhand (1540) Nrth East (501) West Bengal (781) Bihar/Jharkhand (991) Chhattisgarh (243) Orissa (534) Andaman & Nicbar (19) Kerala, Lakshwadeep (306) Andhra Pradesh (899) Tamil Nadu, Pndicherry (669) Ttal Offices State Bank f India has 84 verseas ffices in 32 cuntries and 520 crrespndent banking relatinships. Brand State Bank f India is ranked: n.2 in terms f brand equity, as measured by AC Nielsen. Mst Trusted with Mney acrss all incme grups, accrding t Invest India 2007 Survey. Page 2 f 4

5 Financial strength State Bank f India: has ttal assets f ver A$149 billin, capital, reserves and surplus f A$12.9 billin (FY08) and a market cap f A$29.5 billin (as at 30/4/2008). has a 200-year unbrken prfit recrd and reprted an after-tax prfit f A$1.8 billin in FY08. has strng lcal and internatinal ratings, with a Standard & Pr s rating f BBB-, equal t India s cuntry rating. Internatinal Rating Agency * Rating Standard & Pr s Dec 2006 BBB- Mdy s Aug 2007 Baa2 Fitch Ratings Feb 2007 (unslicited) BBB- * Surce: SBI / Nte: State Bank f India s ratings are equal t the cuntry rating fr India, and cannt be rated higher. Abut the State Bank Grup The State Bank Grup: includes dmestic banking and nn-banking subsidiaries and jint ventures and freign subsidiaries and ventures and has a presence in every area f India s financial services sectr. has a prven track recrd f building successful jint venture cmpanies with internatinal partners: SBI Life Insurance C. Ltd. with Cardif SA, which has built a number three psitin in the market in terms f new business incme amng private players, was the first private life insurance business t becme prfitable and achieved a FY08 prfit f A$9 millin. SBI Life Ttal Premium (A$m) New Business Grwth (% - Feb 2008) +92% 1, FY07 FY08 Industry Private Players SBI Life SBI Funds Management Pvt. Ltd. with Sciete Generale, which is ranked seventh in the industry. SBI Cards & Payment Services Pvt. Ltd. with GE Capital, which is the cuntry s secnd largest card issuer. sells New India insurance plicies under a third party arrangement. Page 3 f 4

6 Abut India s general insurance market Industry: There are eight private sectr, fur public sectr and three specialised insurers perating in the Indian general insurance market. Mtr insurance accunts fr ver 40% f the ttal general insurance market. Grwth rates: The Indian general insurance market has grwn rapidly, at a cmpund annual rate f 16% ver the past fur years, but general insurance penetratin in terms f premium as percentage f GDP still had nly reached a lw 0.8% in Cmbined with the cuntry s strng ecnmic grwth, the lw insurance penetratin is expected t result in a 15-20% cmpund annual grwth rate in GWP ver the next 10 years. Within the verall market, private players have achieved a cmpund annual grwth rate f 47% ver the past five years, giving them a 40% market share as f February % 9% 15% 20% 27% 35% 96% 91% 86% 80% 73% 65% FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 Private Players Market Share Public Sectr Market Share Regulatry envirnment: Despite the intrductin f de-tarifficatin in January 2007 and resulting price reductins, industry grwth rates have remained high, with the sectr grwing by 12% and private players achieving 25% grwth in FY08. 2 Surce: IRDA Jurnals Page 4 f 4