Mumbai : HDFC Ergo General Insurance, which has just completed acquisition of L&T General Insurance to become the third largest private sector non-life insurer, has set a target of clocking 45 per cent business growth of the combined entity this year.
Prior to the acquisition, HDFC Ergo was the fourth largest player after ICICI Lombard, Bajaj Allianz and Iffco Tokio.
In the financial year ended March 31, 2016, HDFC Ergo had a gross written premium (GWP) income of Rs 3,465 crore, which was a growth of 45 per cent from Rs 3,257 crore a year ago.
L&T General had closed last year with a GWP of Rs 483 crore. HDFC Ergo had said on Friday that it had got the requisite regulatory approvals from the Insurance Regulatory and Development Authority and the Competition Commission for buying out L&T General.
A formal merger will happen only after the Bombay High Court approves it, which is expected over the next few months.
“Our GWP grew more than 45 per cent last fiscal year and we are hopeful of maintaining the same growth momentum this year as well taking our combined income to over Rs 5,700 crore,” HDFC Ergo executive director Mukesh Kumar told PTI.
Kumar has been appointed as the new managing director and chief executive of L&T General Insurance. When asked if the merger will lead to retrenchment, Kumar maintained that the company will retain all the employees of the merged entity.
“We will retain all the 750 employees of L&T General, post-merger,” he said, adding “the combined entity will be having 100 products on offer.” After the merger, the market share of the combined entity will increase to 4.2 per cent from 3.7 per cent as of March 2016, HDFC Ergo General Insurance managing director and chief executive Ritesh Kumar said, adding that among the private players, the same will jump to 9 per cent from 7.5 per cent last year.
Signalling consolidation in the cluttered general insurance space — where 29 players including the four state-run ones operate — HDFC Ergo had in June announced a buyout of its smaller rival for Rs 551 crore. As per the data from the industry body General Insurance Council, the gross written premium of the non-life industry grew 16.4 per cent to Rs 45,321 crore till August, from Rs 38,936 crore a year ago.