News 445 views February 21, 2020

Now Apollo Munich is HDFC ERGO Health Insurance

On January 9th,2020 the trading at BSE showed the closing value of HDFC shares at Rs.2457.10 that was a 2.12 % increase. What do you think might have been the reason for such an increase? The underlying reason was all over the financial news columns of Indian new papers and news channels: Apollo Munich is now HDFC Ergo Health Insurance. HDFC now is a big stakeholder of Apollo Munich by buying 50.80% of its stake for Rs.1495.81crore and 0.36%of employees share for Rs.10.67 crore from Apollo hospitals and its stake holding employees. The share in the equity of Apollo Munich that HDFC has acquired is 51.16%. Apollo Munich Health Insurance is thus, now a subsidiary of HDFC Ltd. and is renamed as HDFC Ergo Health Insurance Ltd. As per approval from the IRDAI, Anuj Tyagi has been appointed the Managing Director and CEO of HDFC ERGO Health Insurance Company. The merger of HDFC ERGO Health and HDFC ERGO General Insurance is desired so that HDFC can become one of the major insurance service providers in the health and accidental coverage and in fact can become the second-largest private insurance company in India.

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What is HDFC Limited?

HDFC (Housing Development Finance Corporation Ltd.) is a leading mortgage lender and financial services company. It is based in Mumbai in India. It is majorly known for housing finance. A part of it also deals in education loans, general insurance, asset management, life insurance.

What is Apollo Hospitals?

Apollo Hospitals is India’s largest multi-specialty healthcare group based in Chennai, India with a wide network of hospitals providing best treatment services, pharmacies, diagnostic clinics. It is the first corporate treatment in India founded by Dr. Pratap C. Reddy in 1983. There are almost 186plus branches of Apollo Munich throughout India.

What is Apollo Munich Health Insurance?

Apollo Munich health insurance is a joint venture between Apollo Hospitals and Munich Re, reinsurer based in German. It provides innovative products in health, accident and travel insurance. It is widely spread over the country with a huge number of employees providing uncomplicated services.

What is HDFC ERGO General Insurance Company?

HDFC ERGO General Insurance Company is a joint venture between HDFC and ERGO International AG with both having 51:49 share. ERGO International AG is an insurance company of Germany based Munich Re Group. It is spread across 112 cities with 126 branches with its innovative plans and amazing customer service experience. It provides two types of products.:

  1. Retail Sector Products- Health, travel, home, motor vehicle, accident, cybersecurity policy.
  2. Corporate Sector products- Group Health, Marine, Property, Engineering.

Approvals took by HDFC for acquiring the stake in Apollo Munich:

Approvals from following authorities were taken by HDFC:-

  1. IRDAI (Insurance Regulatory and Development Authority of India)
  2. CCI (Competition Commission Of India)
  3. RBI (Reserve Bank of India)

Further Approvals required for the merger of HDFC ERGO Health and HDFC ERGO General Insurance:

Approval of the following authorities are required for the merger:-

  1. NCLT (National Company Law Tribunal)
  2. SEBI (Securities and Exchange Board of India)
  3. IRDAI for final approval

Benefits of the merger assured to the policyholders of Apollo Munich:

  1. the policyholders of Apollo Munich will become the responsibility of HDFC ERGO Health Insurance.
  2. Policy terms and renewal terms of the policies will remain the same as in Apollo Munich.
  3. A Huge network of cashless hospitals- A wide range of around 10000+ cashless hospitals are assured.
  4. A Larger variety of products – A wide variety of products are assured to be there for ease of your choice.
  5. 24×7 high-quality customer service.
  6. Widely distributed
  7. Innovative Technology

Thus, the powerful combination of Apollo Munich and HDFC in health insurance will result in a remarkable organization. The proposed merger will be advantageous for the policyholders as they can now get enhanced and innovative services.

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