State: NEW SOUTH WALES
Sector: FINANCIAL SERVICES
AMP IN INDIA
For more than a 150 years, AMP, Australia’s largest insurance company has assisted Australians with their personal investments. Globally the company manages assets worth A$300 billion. AMP has expanded significantly from its Australian base and through several strategic mergers and acquisitions, partnerships and alliances has extensive international operations. To date, AMP has made two major commitments to the Indian market; one in the infrastructure investment area and the other in the financial services sector. In 1999, AMP Henderson Global Investors and the Unit Trust of India, UTI, together launched an India infrastructure fund, committing a total of A$100 million. The fund focuses on opportunities in the Indian power generation, transport, oil and gas distribution, telecommunications and urban infrastructure areas and to date has made two investments into India.
In 2000, AMP also entered a joint venture with the Sanmar Group of Chennai to establish a new insurance company in India. AMP will hold the maximum allowable stake of 26 per cent of the joint venture. The joint venture’s life insurance licence application is well advanced.
Once issued, the joint venture will focus on distributing traditional life, pension and savings products via an agency network. AMP is impressed by the huge potential of the Indian market, with its rapidly growing population and middle class. Relatively high savings rates (26 per cent) and low insurance penetration (1.24 per cent of GDP) increase India’s attractiveness to AMP. Similar parliamentary and legal systems combined with a common language, all make India a relatively easy place to do business.
Both AMP and AMP Henderson Global Investors developed strong relationships with their partners and rely on their partners’ connections with the Indian bureaucracy; they did not use consultants. Seconding Australian staff to Indian companies proved useful in building personal networks and breaking down cultural barriers. AMP’s links with UTI proved valuable in understanding Indian business practices, dealing with government officials and conducting business in India.
AMP noted that Indian companies often prefer to enter joint ventures with US, European and occasionally Japanese companies. AMP suggests Australian companies should stress the differences between Australian companies compared to European or American competitors. Marketing, especially at cricket grounds, has proved an especially effective way of increasing brand awareness. AMP feels Australian companies should stress business connections with US or European companies, as Indian counterparts will instantly recognise the value of these relationships. For example, AMP highlights its current standing in the United Kingdom including its partnerships with Virgin, Pearl, NPI and London Life.
Source: AMP, 2001.