In a joint statement Indian housing finance pioneer HDFC Ltd. and Germany’s ERGO (Munich Re’s primary insurance division) announced that they have agreed to form a general insurance joint venture.
The transaction is subject to regulatory approval by the Indian insurance regulatory authority IRDA. HDFC and ERGO intend to complete the proposed transaction by the end of 2007. Both parties agreed that the financial details of the transaction would not be disclosed.
Under the agreement, ERGO International AG, will acquire a 26 percent share in HDFC General Insurance Ltd., the remainder being held by HDFC. Munich Re noted that the “two strong partners” are an “operational and cultural fit,” and will “form a powerful venture in the Indian general insurance market.”
The new joint-venture company will be named HDFC ERGO General Insurance Ltd. and will headquartered in Mumbai. Munich Re CEO Nikolaus von Bomhard assisted at the signing of the agreement, which was also attended by German Chancellor Dr. Angela Merkel, Indian Prime Minister Dr. Manmohan Singh and Deepak Parekh, Chairman of the Board of HDFC Ltd.
“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,” von Bomhard commented. “HDFC is one of the leading financial services conglomerates and the premier housing finance institution in India.”
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.”
Munich Re noted that 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, commented: “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.”
Source: Munch Re: www.munichre.com
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