After exiting from its IT outsourcing outfit, financially battered American International Group (AIG) is now gearing up to sell its 26 per cent stake in Tata AIG Life Insurance to its Indian partner. Tata, which holds 74 per cent in the life insurance joint venture, has roped in consulting and auditing firm KPMG to structure the deal. However, AIG will continue in another joint venture, Tata AIG General Insurance.

According to analysts, AIG’s 26 per cent stake in Tata AIG Life could fetch up to

Rs 800 crore, as the global financial conglomerate will charge Tata a huge premium for its expertise provided to the JV. Replying to queries on the issue, a Tata Sons spokesperson said, “As stated several times before, we do not wish to comment on such speculation.”

Launched in 2001, Mumbai-headquartered Tata AIG Life has built a substantial life insurance operation in India and has some 200 offices across the country and assets of around Rs 10,000 crore. It is yet uncertain whether Tata would run the business itself or divest the 26 per cent from AIG to other foreign partners.

AIG sources pointed out that the company is in the process of restructuring its life insurance business in Asia, which operates under the ambit of American International Assurance (AIA). Earlier, AIG had announced it would accelerate steps to position AIA as an independent entity and seek public listing on an Asian stock exchange, depending on market conditions and subject to regulatory approval.

... contd.