02 November 2012

ERGO and Avantha Group will launch life insurance company in India

01 November 2012 - The ERGO Insurance Group is strengthening its presence in the emerging Asian markets by signing a joint venture with the Avantha Group in India. The new company will offer life insurance products to private customers. With this strategic move, ERGO continues to pursue its international growth strategy. 

ERGO and Avantha are setting up the new company which is to be named Avantha ERGO Life Insurance Company and will have its head office in Mumbai. The agreement was signed today by Gautam Thapar, Chairman and CEO of Avantha, and Dr. Jochen Messemer, Chairman of the Board of ERGO International AG. Subject to further regulatory approval, operations will commence at the beginning of 2014. ERGO’s initial share in the joint venture is 26 percent, which is – at the moment - the maximum possible shareholding for a foreign investor in an Indian insurance company. ERGO aims to increase its share once the regulatory framework allows to do so. 

The life insurance joint venture will primarily offer unit-linked and traditional life insurance products to private customers in India. ERGO contributes its technical and risk management expertise and international know-how in setting-up life insurance operations. 

India has one of the fastest growing economies and insurance markets globally. The long-term growth projections for the economy as well as the insurance market are strong and positive, particularly after some regulatory adjustments in 2010/2011 in the Indian life insurance market. Therefore, Dr. Jochen Messemer is convinced of the potential of the Indian insurance market: “India currently represents more than 17 percent of the world’s population, but only 2 percent of total life insurance premiums. This is one reason why we believe the Indian life insurance market will expand and that it is highly attractive for new private players.” 

India is one of ERGO’s strategically important markets where the Company is already operating with HDFC ERGO, a joint venture of ERGO and Housing Development Finance Corporation (HDFC) founded in 2007. The joint venture offers non-life and health insurance products and is one of the top four private non-life insurers in India. Premium income stands at equalling 281 million euros. 

Founded in 1919, Avantha Group is one of India’s leading business conglomerates with 20,000 employees and total revenues of equalling 3.1 billion euros. Its business covers diverse areas, including for example paper processing, power transmission and distribution equipment as well as chemicals and information technology. 

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. 50,000 people work for the Group, either as salaried employees or as full-time self-employed sales representatives. In 2011, ERGO recorded a premium income of 20 billion euros and paid out benefits to customers amounting to 17.5 billion euros. ERGO is part of Munich Re, one of the world’s leading reinsurers and risk carriers. 

Source: ERGO