Insurance merger to create India’s third largest general insurer

The merger, which will see ICICI Lombard acquire Bharti AXA through a share swap deal, will create an entity with a combined annual premium of US$2.2 billion, and a market share of around 8.7 per cent, as reported by The Economic Times. Both Bharti Enterprises and AXA will receive a total of 35.8 million shares in ICICI Lombard (worth approximately $617 million) due to their 51:49 split ownership of Bharti AXA.

“Through this proposed transaction, ICICI Lombard shall be able to augment its distribution strength with Bharti AXA’s existing distribution partnerships,” ICICI Lombard said in a statement. “The combined entity shall also benefit from continued partnerships with Bharti Enterprises, one of India’s leading business groups with diversified interests, and AXA, a well-reputed global insurer.”

The transaction is pending approval of the Insurance Regulatory and Development Authority of India, Competition Commission of India, Securities and Exchange Board of India, Reserve Bank of India, and the National Company Law Tribunal.

“The merger of Bharti AXA General Insurance with ICICI Lombard General Insurance is an outgrowth of efforts for bringing greater business synergies and enhancing value-creation for all stakeholders. Synergies in technology, distribution through own channels and partners and servicing touch points would be the new hallmarks for Bharti AXA policyholders, who are expected to gain from the comprehensive product suite, enhanced services and strengthened bandwidth," said Sanjeev Srinivasan, Managing Director and CEO, Bharti AXA General Insurance.

Having covered many insurance developments in India recently, ITIJ notes that India is looking at much market growth in its insurance sector, along with an increased demand for innovative (and often digital) insurance solutions. How will the merger between ICICI Lombard and Bharti AXA unfold in the coming months? With products in the motor, health and travel categories, the knock-on effect on policyholders, in terms of services and premiums, will need to be managed carefully. But, hopefully, a more comprehensive product offering will soon be available to the market.