HDFC Ergo merges L&T insurance biz

Mumbai:

HDFC ERGO General Insurance

– a

joint venture

between HDFC and German insurer Ergo has completed the merger of HDFC General Insurance (formerly L&T General Insurance) with itself. The merger has come into effect from August 16 following an approval by the

National Company Law Tribunal

and the insurance regulator.

This is the first amalgamation in the non-life sector and consolidates HDFC Ergo’s position as the third-largest private insurer with a market share of over to 5.25% on end-June 2017. Last year HDFC Ergo had bought out L&T General Insurance which it operated as wholly owned subsidiary until the merger received all approvals.

The net worth of HDFC ERGO (stand-alone) as on March 31, 2017 stood at Rs 1,812 crore. However, the net worth of the merged entity as on March 31, 2017, is Rs 1,485 crore due to accumulated losses in the acquired entity (ie L&T General Insurance).

Speaking to TOI, Ritesh Kumar, MD & CEO, HDFC ERGO General Insurance, said, that the merger provided HDFC ERGO access to an agency business and new distribution channels including L&T Finance, City Union Bank and Saraswat Cooperative Bank. The company has also decided to retain most of the products of L&T General Insurance including its popular top-up mediclaim cover.

Kumar said that the company would not be retrenching employees but would redeploy and reposition staff. Mukesh Kumar, executive director of HDFC ERGO, who had moved to head HDFC General Insurance, has returned to the parent company.

Post-merger, HDFC ERGO would focus on growing its motor insurance business which is currently 29% of its portfolio. “We would like to bring the share of motor in our portfolio closer to that of industry levels which is around 41%,” said Kumar.

The company has built a superior digital platform and has launched a ‘voice of customer’ project where it will treat every inward call as a complaint and change its processes to address the issue. “For instance if a customer calls us to complain that he has not received the policy, we will make process changes so that he is given an idea of when he will receive the policy at the time of purchase,” said Kumar. The company has improved its digital platform and has also empowered call centres to service requests instantly.

Kumar said that the survey process has also been made straight-through so that photos taken by a surveyor on his app are uploaded real-time and approvals are instant instead of end of day.


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