AMP wants more of Asia

By Phil Boeyen, ShareChat Business News Editor

Monday 14th May 2001

Insurance and financial services company AMP (NZSE: AMP) is expanding its reach into Japan and India.

CEO Paul Batchelor says the move is consistent with the company's international strategy of prudent, targeted expansion from its home bases of Australia and the UK into high growth markets that will create strong returns in the future.

"AMP is adopting a long-term, low-risk approach in Asia, establishing partnerships with strong and reputable local players and creating attractive options for the future.

"The two initiatives are in countries we have focused on because of their long term potential, and represent another two steps in the strategy previously disclosed to the market."

In Japan tech company NEC will take a 10% stake in AMP's Japanese subsidiary, providing access to its customers and becoming AMP's preferred technology partner and supplier.

Total investment in 2001 will be A$32 million but total capital is expected to rise up to A$200 million over five years.

AMP Japan's business model will be built around offering a targeted range of financial products via an e-enabled distribution platform.

In India AMP says it is establishing a joint venture with The Sanmar Group to be known as AMP Sanmar Assurance Company.

The partners will invest A$60 million over the next five years. AMP will hold a 26% stake in the joint venture company, the maximum allowed by Indian regulation.

"With over half the world's population, a rapidly emerging middle class, a strong savings culture and a window of opportunity thanks to deregulation and changing market structures, Asia is a significant long term opportunity for AMP," says AMP spokesman Tim Wade.

Mr Wade said that India's life insurance market offers significant potential, with a forecast compound annual growth rate of 15-18% over the next ten years.

The Indian insurance sector was recently opened to foreign and private sector investment.

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