ERGO acquires additional shares of HDFC ERGO

2015/12/17

ERGO

The ERGO Insurance Group, Düsseldorf, will acquire additional 22.9 percent of shares of HDFC ERGO General Insurance Company (HDFC ERGO) from its joint venture partner, the Housing Development Finance Corporation (HDFC), Mumbai, India and increase its shareholdings to 48.7 percent. Representatives of both companies signed a share purchase agreement today. The parties agreed on a purchase price of INR 1122 cr (€ 155 million). With the share acquisition, ERGO strengthens its presence in India as one of its key markets and continues to pursue its international growth strategy.

HDFC ERGO as India’s fourth largest non-life insurance company in the private sector offers a complete range of general insurance products in the retail and customised products in the corporate space. It is present in 108 branches with an employee base of over 2000 professionals. HDFC ERGO has a wide distribution network comprising of brokers, retail and corporate agents and bancassurance besides its own direct sales force. In the financial year 2014 / 2015, gross written premium income stood at INR 3257 cr (€ 450 million) and a profit after tax of INR 104 cr (€ 14.4 million).

HDFC ERGO grew more than twelvefold since ERGO’s entry in March 2008 to March 2015. Its profitable business growth is driven by a large non-motor portfolio and a high degree of digitalisation: In the financial year 2014 / 2015, more than 89 percent of policies were issued in an automated mode. With HDFC Bank, HDFC ERGO has the largest bancassurance affiliation in the Indian non-life insurance market.

Upon completion of the transaction, the share ownership in HDFC ERGO General Insurance Company of ERGO and HDFC will be 48.7 percent and 50.7 percent, respectively. The remaining shares are held through an Employee Stock Option Scheme. The purchase price refers to a total value of INR 4900 cr (€ 678 million) of the company.

The opportunity for ERGO International to increase its shareholdings in HDFC ERGO was provided through the decision of the Indian Government in March 2015 to increase the foreign direct investment cap in the insurance sector from 26 percent to 49 percent.

Closing of the deal is subject to regulatory approval customary for transactions of this type.

About the ERGO Insurance Group  
ERGO is one of the major insurance groups in Germany and Europe. Worldwide, the Group is represented in over 30 countries and concentrates on Europe and Asia. ERGO offers a comprehensive spectrum of insurance, provision and services. In its home market of Germany, ERGO ranks among the leading providers across all segments. About 43,000 people work for the Group, either as salaried employees or as full-time self-employed sales representatives. In 2014, ERGO recorded a premium income of 18 billion euros and rendered benefits to customers at almost the same level. ERGO is part of Munich Re, one of the world's leading reinsurers and risk carriers. More at www.ergo.com

About HDFC ERGO
HDFC ERGO General Insurance Company Ltd. is a 74:26 joint venture between HDFC Ltd., India’s premier Housing Finance Institution and ERGO International AG, the primary insurance entity of Munich Re Group. The Company offers complete range of general insurance products ranging from Motor, Health, Travel, Home and Personal Accident in the retail space and customized products like Property, Marine and Liability Insurance in the corporate space. HDFC ERGO is expanding its network across the country and is today present in 108 branches spread across 89 cities with an employee base of over 2000 professionals. The Company also has a wide distribution network comprising of brokers, retail and corporate agents and bancassurance besides its own direct sales force.

About HDFC
HDFC was promoted in October 1977 as a public limited company specialising in providing housing finance primarily to individual households and corporates for the purchase and construction of residential housing. HDFC is India’s first retail housing finance company and is currently one of the largest originators of housing loans in the country. As at September 30, 2015, HDFC had gross loans outstanding of Rs. 2,671 billion (US$ 40.60 billion). Since inception, HDFC has financed 5.2 million housing units. 78% of shareholders in HDFC are foreign investors. HDFC’s market capitalisation as at September 30, 2015 stood at US$ 29 billion. Over the years, the HDFC group has emerged as a strong financial conglomerate with a presence in banking, life and general insurance, asset management, venture capital and education finance. Besides HDFC ERGO General Insurance Company Limited, HDFC’s key associate and subsidiary companies include HDFC Bank Limited, HDFC Standard Life Insurance Company Limited, HDFC Asset Management Company Limited, GRUH Finance Limited, HDFC Venture Capital Limited and Credila Financial Services Limited.
Disclaimer
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.

Further Information

For media inquiries please contact:
Florian Amberg
Florian Amberg
ERGO Versicherungsgruppe AG
Media Relations
media-relations@ergo.de
Phone
+49 211 477-3174
Fax
+49 211 477-1511
E-Mail
florian.amberg@ergo.de
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