| David Hampton, CEO of GIO Sanmar and General Manager
(International Development), GIO Australia Holdings Ltd, is serious
about the Australian insurance giant’s rendezvous with India.
“We will be disappointed if the Insurance Bill does not go through,
but India is a big and important market and we are patient enough
to wait,” he told The Economic Times in Chennai. |
| His visit to India is significant in the context
of GIO undergoing a change in its equity structure with AMP, another
global player from Australia, acquiring 57 per cent stake. |
| Hampton joined GIO Australia as group treasurer
and has been responsible for fund management activities in excess
of $ 3 billion in diversified portfolios. He has been involved in
managing Asian businesses for the last three years and is Chief Executive
of GIO Sanmar since 1998. |
| GIO Australia has teamed up with the Chennai based
Sanmar group for jointly working in the areas of insurance, asset
management, bonds trading, share broking and risk management services.
|
| With AMP having acquired a 57 per cent stake in
GIO, has your strategy for India undergone any change? |
| AMP and GIO share a similarity in product range
which includes life and general insurance and pension fund management
in Australia. At this stage, we have a parallel strategy for India.
GIO will focus on the retail market in a big way. In Australia for
instance, we have a customer base of two million. |
| Do you have a specific plan for India’s
retail segment? |
| The range of financial products available in India
is becoming complicated. Things will become less bank-centric. In
Europe and other markets we have found that the location and number
of branches are a less important factor. Financial services are very
susceptible to changes in technology. We believe that a range of distribution
channels is appropriate for India. But the important thing is to understand
the target people. |
| Basically, the real Indian market is around 30 million
- 40 million and not 300 million. In Australia, we conduct investment
roadshows and analyse the need, income flow and savings ambition of
our customers. In India, we’re talking to market research people
for feedback on customer profiles. In retail services, distribution
is the key element and technology will narrow down the time of business. |
| How fast does technology work in assessing claims
and in settlement? |
| In Australia for example, if a car meets with an
accident, the assessee surveys the damage on tape which is captured
by a digital camera on location. Clients are assisted on the spot.
Assessment is done across the table and claims are settled within
a swift time frame. |
| Besides, we have done away with paperwork. Enquiries
are taken through telephone, a sophisticated system generates the
policy and clients can pay through credit card. In India, its effectiveness
will be known only when implemented. However, the distribution channel
will be a combination of Internet, an interactive voice response system
and physical distribution. |
| Could you throw some light on your proposed asset
management activities? |
| Asset management is a 7-10 year payback in India.
In financial services, whether insurance or mutual funds, the crux
is how effectively one manages the funds. Successful businesses reflect
investment performances and it’s a core skill we need to develop
here. We will most probably set up an internal fund from accruals
from our other businesses; mainly insurance. Both asset and risk management
services should be in place once the insurance business comes through. |
| Risk management is still nascent in India.How
do you propose to develop the market? |
| In India, we will have to start with physical risks.
We need to look into the sort of things that could happen to businesses
which could have an impact in the bottomline. We will look into the
sort of lines of credit, liquidity in balance sheets, people and assets. |
| How significant is India to GIO, vis-a-vis other
markets? |
| The Indian economy is growing at 5-6 per cent and
has enormous potential to tap. It has been resilient to the South
East Asian crisis and has a reasonably sophisticated financial services
market. Although we might have a few hiccups along the way, we’re
bullish about India in the long term. |
