Market sources pointed out Allianz plans to exit Bajaj Allianz Life Insurance Co. and Bajaj Allianz General Insurance Co. because its Indian partner isn’t allowing the German insurer to raise its stakes at a discounted price which was agreed upon at the time of signing the documents for the setting up joint venture in early 2000.

Mumbai:Germany multinational Allianz Se, has fina;;y decided to exit its over two decades long life -Bajaj Alliannz Life Insurance-and general insurance-Bajaj Allianz General Insurance- joint ventures with Bajaj Group.

Bajaj holds a 74% stake in the joint ventures with Allianz.

In a public disclosure, Bajaj Finserv, the holding company of both the joint ventures has informed the BSE on Tuesday about the proposed plan of Allianz to exit the joint ventures.

Allianz SE has decided to scrap two Indian joint ventures with Bajaj Finserv Ltd., in a dispute over the direction of the partnership, which could not be resolved between the partners despite extended negotiztions.

Market sources pointed out Allianz plans to exit Bajaj Allianz Life Insurance Co. and Bajaj Allianz General Insurance Co. because its Indian partner isn’t allowing the German insurer to raise its stakes at a discounted price which was agreed upon at the time of signing the documents for the setting up joint venture in early 2000.

It also isn’t given a say in strategic decisions in running the joint ventures.

While the differences between the companies have been simmering for years, the latest impasse has brought the joint ventures to the brink of collapse after more than two decades.

Allianz is instead looking to now buy stakes in newly established insurance firms to retain a sizeable presence in the fast-growing Indian economy.

The other concern of Allianz has set up foregn reinsurance branch (FRB) in India while another company of Allianz has opened the first overseas re/insurance branch in India’s first International Financial Services Centre(IFSC) at Gujrat’s Gift City recently.

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.

The Bajaj Allianz general insurer is the third-largest in the country by gross written premiums, while the Bajaj Allianz life insurer is one of the fastest-growing with assets under management of 1 trillion rupees ($11.9 billion) as of March 31.