CP gets German partner, The Nation (Thailand);
by ACHARA PONGVUTITHAM; 06-26-2000
CHAROEN Pokphand Group's two insurance companies will be renamed next month to welcome new strategic partner Allianz Group, which completed the joint venture deal by acquiring 25 per cent of CP's life and general insurance businesses.
CP Life Assurance Co. Ltd. will become Allianz CP Life Assurance Co. Ltd. and CP Insurance Co. Ltd. Allianz CP Insurance Co. Ltd.
The German-based group has completed a strategic partner deal to purchase a 25 per cent stake, worth Bt330 million, in CP Life Assurance, said an informed CP source.
However, he declined to disclose the value of the acquisition.
CP Group wants a foreign insurance partner in order to strengthen its operations, network, marketing and technology. And insurance is Allianz's diversified business.
CP received an answering book from the Insurance Department to acknowledge the group's joint venture deals.
The German group will take top management control in the life insurance firm due to a lack of experience at CP, the source said.
The parent company will send its chief executive officer to run the life insurance firm and its chief operational officer will join high-level management in the general insurance business in Bangkok, he said.
CP previously recruited general insurance experts to help devise a strategy to ensure business success, he added.
"Our German partner will help engineer the group's life insurance business in terms of technology, network and reinsurance," he said.
The life insurance firm is recruiting manpower to smooth operations in the long run. CP Life Assurance started selling products this year, initially
concentrating on the group's employees.
Allianz has been developing its presence in the Thai market since 1990when it formed a joint venture with Navakij Insurance. The German company at that time held 18.5 per cent of Navakij.
Navakij in March reported to the Stock Exchange of Thailand that Allianz would be terminating its business relationship with the company. The departure of Allianz was to end a conflict of interest, as Allianz was concluding a joint-venture deal with CP Group, the company said.
The German partner promises to end any problems with Navakij before joining with CP. "We don't want to have business conflicts with Navakij;we are friends," the source said.
Allianz wants to establish its own network for both life and non-life insurance in Thailand. But Navakij holds only one license for general insurance, so it could not satisfy the group's desire.
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