AMP in Asia
AMP Limited Enters Japanese & Indian retail financial services markets
5/14/01

AMP LIMITED 2001-05-14 ASX-SIGNAL-G

HOMEX - Sydney

+++++++++++++++++++++++++
AMP Limited has today announced its first step into the growing Asian wealth creation and protection markets with the establishment of businesses in two key markets - Japan and India.

AMP's Chief Executive Officer, Mr Paul Batchelor, said the
announcement was 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," Mr Batchelor said.

"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."

Details of AMP's entry into Asia are:

JAPAN

- NEC, one of the country's largest and most respected technology companies, intends to take a 10% equity interest in AMP's Japanese subsidiary, AMP Japan KK.

- NEC will provide access to its customers, and will become AMP's preferred technology partner and supplier in Japan.

- AMP Japan's business model will be built around offering a targeted range of financial products via an e-enabled distribution platform, exploiting the technology capabilities already established in Australia and the UK.

- AMP Japan has also established its first distribution alliance with
financial accounting software and information management service
provider, Miroku Jyoho Service Co (MJS). This will be for
distribution of Toshin (managed fund) and Defined Contribution
Pension (DCP) products.

INDIA

- AMP is establishing a joint venture with The Sanmar Group, which will be known as AMP Sanmar Assurance Company Limited (ASAL).

- AMP will hold a 26% stake in the joint venture company, the maximum allowed by Indian regulation. The opportunity exists to build on this stake as and when local regulations permit, - ASAL is currently applying for a life insurance licence.

AMP's Managing Director of International & Technology Ventures, Mr Tim Wade, said: "Our focus is on sensibly leveraging our experience and capabilities in areas such as financial advice, industry convergence and product aggregation, the shift to Defined
Contribution Pensions, and repositioning and managing an adviser
channel.

"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," Mr Wade said.

 

INVESTMENT IN ASIA

In Japan, the total investment by the partners in the business in 2001 will be approximately $A32 million - 90% from AMP and the balance from NEC. Total capital of the business is expected to rise to up to $A200 million over five years.

In India, the partners expect to invest a total of approximately $A60 million over five years, the majority of which will be invested at the commencement of operations to meet regulatory requirements and establish the business.

JAPAN

Mr Wade said AMP intends to establish itself in the Japanese market by offering an increasing range of financial products, with a strong emphasis on financial planning.

"Japan has an affluent consumer market with one of the highest
savings rate in the world. AMP is in a strong position to offer these
consumers a fresh and simple new solution, a distinct advantage in a market where consumers are now looking for non-traditional providers," he said.

"Delivery of products will comprise a combination of e-business
education, advice and sales, backed by face-to-to-face sales
personnel- an innovative approach in the Japanese market that will
leverage our experience in Australia and the UK."

As a joint venture partner, NEC brings a well-respected name as well as access to customers through its Internet Service Provider
(Biglobe, the second largest in the country with approximately 4
million customers) as well as a number of other business development opportunities.

The agreement with NEC is subject to the signing of fin
al contracts, which is expected in the next few months.

Under the distribution alliance with MJS, DCP products and mutual funds will be offered via MJS to its 8,000 accounting firm clients, and some 500,000 small to medium enterprise clients of these firms.

MJS offers an exclusive relationship to AMP. However, AMP is able to pursue other alliances for promoting its products and services.

INDIA
The joint venture company ASAL will be 26% owned by AMP and the balance by Sanmar in accordance with India's Insurance Regulatory and Development Authority (IRDA) regulations. ASAL will now file ana pplication for an insurance licence with the IRDA, which is subject to approval. ASAL will initially focus on the distribution of traditional life, pensions and savings products through an agency network. It is anticipated that the Indian market will move towards more recent product innovations and distribution methods, such as wrap accounts.

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.

Sanmar Group is one of the top Indian Industrial Corporations based in Chennai, Southern India with several longstanding joint ventures with major International Corporations such as Emerson Electric, FMC, Tyco, Cabot, Bayer and Totalfina Elf Chemicals.

"AMP is delighted to be working with Sanmar, a well-known, highly regarded organisation in India that offers a valuable skill set as an internationally recognised joint venture specialist," Mr Wade said.

"Together, we believe there is great potential to establish a successful financial services business."

Today's announcement complements AMP's existing approach in India, where AMP has a successful partnership with Unit Trust of India (UTI) in asset management. The companies launched an Infrastructure Fund in 1999.

"Sanmar is extremely pleased to be able to bring one of Australia's leading financial services groups, AMP, to India in a Life Insurance joint venture", said Mr N Sankar, Chairman of the Sanmar Group. He added that whilst Sanmar had many joint ventures with partners from all over the world, this was the first with an Australian partner. Given the background of the recent spurt in Indo-Australian relations in different fields of business - telecom, media and entertainment, mining, breweries etc - apart from the traditional sporting ties in cricket, tennis and hockey, Sanmar saw a good future for this venture in India.

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