Home >Money >Personal Finance >HDFC Ergo Health, HDFC Ergo General merger: How will it impact customers?
Photo: iStock
Photo: iStock

HDFC Ergo Health, HDFC Ergo General merger: How will it impact customers?

  • The merger makes HDFC Ergo the second-largest private insurer in the accident and health insurance business. In FY2019-20, the merged entity had an overall market share of 6.2% and about 8% market share in the accident and health insurance segment.

HDFC Ergo General Insurance recently announced the completion of the merger of HDFC Ergo Health Insurance with itself after the receipt of final approval from the Insurance Regulatory and Development Authority of India (Irdai) last week.

The merger makes HDFC Ergo the second-largest private insurer in the accident and health insurance business. In FY2019-20, the merged entity had an overall market share of 6.2% and about 8% market share in the accident and health insurance segment.

Speaking on the amalgamation process, Deepak Parekh, chairman, HDFC Ergo General Insurance Company said, “It makes HDFC Ergo the one-stop-shop for all our general and health insurance offerings. Health insurance is expected to be one of the growth drivers for the general insurance industry, and with this merger, we are now a dominant player within the health insurance industry."

While, there will be no change in terms of product, premiums and claims for HDFC Ergo General Insurance’s costumers, experts say that the merger will be positive for the policyholders of erstwhile HDFC Ergo Health Insurance.

“There is no point of worry for the policyholders from this merger. It is a win-win situation for them," said Naval Goel, CEO and founder, PolicyX.com, an online insurance marketplace. “For policyholders, there will be no impact, as all the policy benefits will continue as it is. Even renewability of the policy will continue. Usually, these kinds of mergers don’t impact the policyholders, as the insurers have to honor the contract they entered into," he added.

Apollo Munich Health Insurance Co was renamed as HDFC Ergo Health after HDFC Ltd bought 50.80% stake of Apollo Hospitals Group in Apollo Munich for 1,485.14 crore last year.

However, a merger raises many questions in policyholders’ minds, in terms of the impact on their policies, premiums that they pay and on the claims process.

According to Ritesh Kumar, managing director and chief executive officer, HDFC Ergo General, there will be no changes in the existing policy terms and the conditions and the benefits offered. “All benefits accrued thus far will continue to be available. Also, there will be no changes in premiums as well," he said.

Goel said the policyholders will stand to benefit as HDFC Ergo is a big brand and have multiple products under their entity. “Customers will have a wider range of products available, and the reach of HDFC Ergo will be much better in terms of both network hospitals and branches," he said.

As per HDFC Ergo General Insurance, as a merged entity, the policyholders will have access to the cashless network of over 10,000 hospitals for health insurance, a cashless network of more than 7,400 garages for motor insurance and a reach of 203 branch offices.

The policyholders of erstwhile HDFC Ergo health should also note that all claims, including pending ones, will be honored as per their policy terms and the existing health cards will continue to be valid.

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