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Mumbai: HDFC Ergo General Insurance MD & CEO Ritesh Kumar has said that HDFC’s merger with HDFC Bank would result in synergies with the new parent company, which the insurer can benefit from. “One of our biggest distributors has become our parent. There will be huge synergies that will arise from this, and we hope to gain from them,” he said.
Kumar pointed out that while the previous HDFC had only 4,000 employees, the bank had 1.7 lakh. He also emphasised that although the bank was part of the same group, synergies with a sibling are not considered in the same way as with a parent.
After becoming the second-largest private general insurer in FY23, HDFC Ergo aims to increase retention through relationship management and improve margins by reducing frictional costs like fraud & operating expenses. “Immediately after the merger with Apollo Munich, we became the industry’s number three. Now we have moved up to the number two position.”
The merger with Apollo Munich also led to an increase in the company’s share of retail health insurance in the industry, from 2.9% to 9.7%, making it a more diversified non-life insurer.“Our portfolio has become more diversified and resilient after the merger. Currently, 37% of our business comes from accident and health, and we have a large agency force of around 180,000 agents,” said Kumar.
Within six months of announcing the Apollo Munich deal in 2019, the pandemic emerged. “The merger had two impacts. We paid about Rs 1,400 crore for Covid claims. The pandemic also showcased our digital capabilities and highlighted the need for digital delivery in the industry.”Kumar stated that despite experiencing the first quarterly loss in a decade due to the pandemic, the board’s guidance was, “If you cannot rise to the occasion now, then when?”
According to Kumar, the pandemic and the disruption caused by new age companies have transformed the company in terms of digital capabilities. Not only underwriting but also surveys are now conducted digitally. Despite its size, the company has only two motor underwriters, with the rest being data scientists and actuaries.
To set itself apart, the company is shifting from customer service to customer experience. As part of this strategy, customer profiling will be used to expedite payouts, even before the completion of the claims process, for those who are unlikely to commit fraud. “For senior citizens and those with recurring treatments, we will have teams reaching out to them for assistance so that they do not have to contact us,” said Kumar.
Kumar pointed out that while the previous HDFC had only 4,000 employees, the bank had 1.7 lakh. He also emphasised that although the bank was part of the same group, synergies with a sibling are not considered in the same way as with a parent.
After becoming the second-largest private general insurer in FY23, HDFC Ergo aims to increase retention through relationship management and improve margins by reducing frictional costs like fraud & operating expenses. “Immediately after the merger with Apollo Munich, we became the industry’s number three. Now we have moved up to the number two position.”
The merger with Apollo Munich also led to an increase in the company’s share of retail health insurance in the industry, from 2.9% to 9.7%, making it a more diversified non-life insurer.“Our portfolio has become more diversified and resilient after the merger. Currently, 37% of our business comes from accident and health, and we have a large agency force of around 180,000 agents,” said Kumar.
Within six months of announcing the Apollo Munich deal in 2019, the pandemic emerged. “The merger had two impacts. We paid about Rs 1,400 crore for Covid claims. The pandemic also showcased our digital capabilities and highlighted the need for digital delivery in the industry.”Kumar stated that despite experiencing the first quarterly loss in a decade due to the pandemic, the board’s guidance was, “If you cannot rise to the occasion now, then when?”
According to Kumar, the pandemic and the disruption caused by new age companies have transformed the company in terms of digital capabilities. Not only underwriting but also surveys are now conducted digitally. Despite its size, the company has only two motor underwriters, with the rest being data scientists and actuaries.
To set itself apart, the company is shifting from customer service to customer experience. As part of this strategy, customer profiling will be used to expedite payouts, even before the completion of the claims process, for those who are unlikely to commit fraud. “For senior citizens and those with recurring treatments, we will have teams reaching out to them for assistance so that they do not have to contact us,” said Kumar.
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