Insurance Blog

The Board of Directors of HDFC Standard Life Insurance Company Limited(“HDFC Life”),Max Life Insurance Company Limited (“Max Life”),Max Financial Services Limited (“Max Financial Services”)and Max India Limited (“MaxIndia”)at their respective meetings held today, approved entering intodefinitive agreements for amalgamation of businesses between theentities through a composite Scheme of Arrangement.
Asa part of the proposed transaction, Max Life will be merged with MaxFinancial Services, thereafter the insurance undertaking in theresultant Max Financial Services would be demerged to HDFC Life andlastly, Max Financial Services will be merged into Max India. As aresult of the transaction, HDFC Life would be listed on the NationalStock Exchange of India Ltd. and BSE Ltd., subject to receipt ofrequisite regulatory approvals.
The merger will make HDFC Life India's largest listed life insurance company with an estimated market value of Rs 67,000 croreonce the all-share transaction is completed in about 12-15 months.
Source- Business Today

Asconsolidation wave begins in the insurance industry, some playershave a contrarian view and feel there may be place for more insurersas the penetration level remains too low especially in non-lifesegment.
Industryplayers feel that time is not ripe to go for consolidation asinsurance penetration is too low. Non-life insurance penetration is amere 0.8 per cent, whereas in case of life insurance, it is around 3per cent.
Despiterecent announcement of merger of HDFC Life and Max Life andacquisition of L&T General Insurance by HDFC Ergo, the playerssaid industry has still a long way to go before large-scaleconsolidation can take place.
"All the non-life companies are not doing well and under writing losses continue to be a major worry. I think more and more players should be brought under insurance cover and for that we need more players,"National Insurance Company chair man Sanath Kumar said.
Private players also support this and say that consolidation is faraway.
"It is too early to go for consolidation. There are very few players and the penetration is too low in the country when it comes to general insurance," Liberty Videocon General Insurance chief executive Roopam Asthana said.
"It is only a question of a few promoters that don't want to put any further capital into their ventures. So I will rather call some ofthe recent consolidations as accommodation rather than consolidation," he said.
Bajaj Allianz Life managing director Anuj Agarwal said, "we will haveto see if the objective of recent two mergers is served before weconclude if it is the right time to go for consolidation."
RelianceGeneral Insurance chief executive Rakesh Jain opines that there arenow a reasonable number of players on non-life space. Some of themmay think of getting merged with the companies which are havinglarger size.
But it will be based on three basic principles which include new geography, new customer segment and new products, he said.