New Delhi:
Mortgage lender HDFC Ltd on Thursday said insurance regulator Irdai has given the final nod for merger of HDFC ERGO Health Insurance with HDFC ERGO General Insurance.
In late September, the National Company Law Tribunal, Mumbai had okayed the scheme of amalgamation between HDFC ERGO Health Insurance (formerly Apollo Munich Health Insurance Co Ltd) and HDFC ERGO General Insurance Co Ltd (HDFC ERGO).
"In this connection, we wish to inform that the Insurance Regulatory and Development Authority of India (Irdai) vide its letter dated November 11, 2020, has given its final approval for merger of HDFC ERGO Health with and into HDFC ERGO," HDFC said in a regulatory filing.
The general and health insurance companies are the subsidiaries of country''s largest mortgage lender HDFC Ltd.
As per the scheme of amalgamation through a share swap deal, there will be dissolution of HDFC ERGO Health without winding up.
Under this, share exchange ratio of 100:385 has been okayed by the board of the subsidiary companies which would mean allocation of 385 shares in HDFC ERGO Health for 100 shares in HDFC ERGO.
Post completion of the merger, HDFC will hold 50.58 per cent stake in HDFC ERGO.
"The board of directors of HDFC ERGO and HDFC ERGO Health…approved the share exchange ratio of 100:385 that is for every 385 shares of Rs 10 each held in HDFC ERGO Health as on the record date, 100 shares of Rs 10 each of HDFC ERGO would be allocated," HDFC said in January this year.
HDFC Ergo Health Insurance Company had mobilised Rs 1,201 crores of premiums in the last seven months(Apr-Oct) of the current fiscal and has an one per cent market share in the domestic general insurance industry.
Before this, HDFC ERGO acquired a majority shareholding in Apollo Munich Health Insurance.
Deepak Parekh, Chairman, HDFC ERGO General Insurance Company said, “This marks the second successful merger in India’s general insurance sector, following the merger of L&T General Insurance and HDFC ERGO in 2017. It makes HDFC ERGO the one-stop-shop for all our general and health insurance offerings. Health insurance is expected to be one of the growth drivers for the general insurance industry, and with this merger, we are now a dominant player within the health insurance industry.”
Oliver Willmes, COO ERGO International & Director, HDFC ERGO General Insurance Company said, “The merger provides us with the opportunity to grow by increasing our footprint and distribution network, in line with our strategic objective to be amongst the top private insurers in our core markets. We fully believe in the HDFC ERGO management, which has done a great job putting tremendous effort into the merger of the two companies. We expect significant synergy potential based on our mature business practices such as high degree of automation and scale, leading to cost efficiencies and better operating ratios.”
Ritesh Kumar, MD & CEO, HDFC ERGO General Insurance Company Ltd. said, “We welcome the policyholders and channel partners of HDFC ERGO Health Insurance into our family and assure them of a seamless transition and enhanced customer experience with the combined expertise of both the entities. We also welcome the employees of HDFC ERGO Health Insurance into our family. Further, our existing policyholders and channel partners will now be able to access the wider product suite of the merged entity and the health insurance expertise and products of HDFC ERGO Health Insurance.”
.HDFC scrip traded 0.31 per cent up at Rs 2331.50 apiece on BSE.
With the merger of HDFC ERGO Health Insurance with HDFC ERGO General Insurance, the number of there stand-alone health insurers will from seven to five..
Earlier,IRDA had asked Reliance General Insurance to take over Reliance Health Insurance as the exclusive health insurers was had fallen short of solvency margin and the financially troubled promoter company Reliance Capital was unable to infuse capital in its health insurance subsidiary.