Policy Matters

If there's one business that lends itself well to having a truly global presence, it's insurance. That's simply because, as Eric Lombard, Chairman & CEO, BNP Paribas Assurance, of which Cardiff is an arm, puts it: "The insurance business thrives on two main pillars. One is that people are getting older everywhere and, two, income levels are also on the rise. We have good reason to expect healthy business in the years to come."

In India, Cardiff owns a 26 per cent stake in a life insurance joint venture with the State Bank of India (SBI). And by the looks of it, Lombard is pleased as punch with his India JV. "The results are much better than we expected from India. The system developed by SBI is very efficient. The Indian economy is vibrant and offers scope for immense growth. We are the first private sector life insurance company in India that reported profits," claims the Chairman.

On the global front, Lombard sees a rosy-enough picture, as he does not expect any "significant downturn in the world economy." Growth has been in handsome double-digits for Cardiff, at close to 20 per cent since 2003. Lombard points out that most of his international operations are profitable, with a few exceptions like Russia. Cardiff, which is a specialist in bancassurance (distribution of insurance products via banks' distribution channels), is now keenly looking at growth in emerging economies. These include Romania, Bulgaria, Ukraine and Turkey. Offices have also been opened in Nigeria, Japan and Mexico recently, with Lombard keen to increase Cardiff's presence in Latin America.

However, what could prove to be a joker in the Cardiff pack is its China operations, currently mere rep offices in Shanghai and Beijing. The insurance major has completed just four years in China, as against six years in India, but chances of the Chinese business gaining higher priority in the near future-if they haven't already-are higher. Reason? China allows foreign direct investment of up to 50 per cent in the insurance sector; in India, the limit is still 26 per cent. Unsurprisingly, Cardiff is currently in negotiations for a joint venture in China. "We will probably settle for a tad below 50 per cent in our proposed Chinese joint venture," says Lombard.