Joint press release issued by HDFC and ERGO
HDFC Ltd. and ERGO agree on general insurance joint venture
Indian housing finance pioneer HDFC Ltd. and Germany’s ERGO join forces in a general insurance joint venture. Under the agreement, the entity for international business, ERGO International AG, will acquire a 26% share in HDFC General Insurance Ltd., the remainder being held by HDFC. With the joint venture, two strong partners with an excellent strategic, operational and cultural fit have come together to form a powerful venture in the Indian general insurance market.
In the presence of German Chancellor Dr. Angela Merkel and Indian Prime Minister Dr. Manmohan Singh, Mr. Deepak Parekh, Chairman of the Board of HDFC Ltd. and Dr. Nikolaus von Bomhard, CEO of ERGO’s parent company, the Munich Re Group, will sign a joint declaration in New Delhi today. The new joint-venture company will be named HDFC ERGO General Insurance Ltd. and will headquartered in Mumbai. Nikolaus von Bomhard said: "We are very pleased that the search for a highly attractive partner for ERGO in general insurance in India has been successful through this teaming up with a top-profile partner. HDFC is one of the leading financial services conglomerates and the premier housing finance institution in India. We believe that HDFC and ERGO are a perfect fit and both will benefit from the ongoing growth of the Indian insurance market." Deepak Parekh added: "I am convinced that ERGO will bring the vast insurance expertise, top-quality technical and operational know-how that made the ERGO Insurance Group a leading player in Germany and throughout Europe to the joint-venture company."
The new partnership enables HDFC Ltd. to successfully grow their existing general insurance operations and further leverage their outstanding brand and distribution strength. Entering the joint venture with HDFC Ltd. underlines the ERGO Insurance Group’s international expansion strategy and offers a direct entry into the Indian general insurance market. Andreas Kleiner, Member of Board of ERGO International AG responsible for Asia, expects a very successful and longstanding cooperation with HDFC and points out: "ERGO is committed to a lean time-to-market approach in product development and operations. We will bring excellent insurance product development and underwriting expertise to the new joint-venture and together with our partner HDFC we will be able to offer competitive and innovative products in line with market requirements." The joint venture aims to advance into the league of top private market players soon.
The transaction is subject to regulatory approval by the Indian insurance regulatory authority IRDA. HDFC Ltd. and the ERGO intend to complete the proposed transaction by the end of 2007. Both parties have agreed that the purchase price of the transaction will remain confidential.
The Housing Development Finance Corporation Limited (HDFC Ltd.) was
incorporated in 1977 with the primary objective of promoting home ownership.
HDFC Ltd. distribution network spans 243 outlets, which include 49 offices of the distribution company, Home Loan Services India Private Limited (HLSIL). In addition, HDFC Ltd. covers over 90 locations through outreach programs. For the six months ended 30th Sept 2007 Total Income increased from INR 26.72 bn to INR 37.21 bn an increase of 39%.
ERGO is the primary insurance entity of Munich Re Group, one of the world's leading risk carriers. ERGO is one of the largest insurance groups in Europe and Germany and is Europe’s market leader in health and legal protection insurance. 33 million clients in 25 countries place their trust in the services, competence and security it provides. In the business year 2006, ERGO Insurance Group had gross premiums written of EUR 16.8bn and a consolidated result of EUR 906m.
This media information contains forward-looking statements that are based on current assumptions and forecasts of the management of Munich Re. Known and unknown risks, uncertainties and other factors could lead to material differences between the forward-looking statements given here and the actual development, in particular the results, financial situation and performance of Munich Re. The company assumes no liability to update these forward-looking statements or to make them conform to future events or developments.