(Oct 23): Jio Financial Services Ltd, controlled by billionaire Mukesh Ambani, has held talks with Allianz SE to set up an insurance partnership in India as the German firm seeks to scrap two existing joint ventures in the country, according to people familiar with the matter.

Allianz and Jio Financial are looking to establish a general insurance and a life insurance company in the South Asian nation, the people said, asking not to be identified as the information isn’t public. The discussions are in early stages and both parties may decide not to proceed with the plan, the people said.

The Munich-based firm has indicated to its current partner Bajaj Finserv Ltd that it’s “actively considering an exit” from the ventures, according to a statement from Bajaj on Tuesday after Bloomberg News reported the planned split. Allianz “has indicated that it remains committed to the Indian insurance market,” according to the statement. The break-up centres around a dispute over the direction of the partnership, people familiar with the matter had said.

A spokesperson for Jio Financial said the firm is unable to comment on speculation. “If and when there are any material developments with respect to the company, we will continue to make necessary disclosures in accordance with our obligations, as we always have,” the spokesperson added. Allianz doesn’t comment on market rumours, a Munich-based spokesperson said.

Jio Financial, helmed by veteran banker KV Kamath, already runs a shadow bank and an insurance brokerage and has joined forces with BlackRock Inc to start an asset management business. Setting up insurance operations will help further the Ambani unit’s ambition of becoming a financial services behemoth.

India’s insurance penetration rate — the ratio of premiums to gross domestic product — is less than half that of countries such as South Africa and Canada, implying strong growth prospects for the sector, insurance regulator data show.

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