1. HDFC’s Deepak Parekh on Max Life deal: Favourable demographics provide a great opportunity

HDFC’s Deepak Parekh on Max Life deal: Favourable demographics provide a great opportunity

HDFC Standard Life Insurance and Max Life Insurance Company Ltd are all set to merge with HDFC Standard Life Insurance Co and Deepak Parekh along with Analjit Singh explained the reasoning behind the deal.

By: | New Delhi | Updated: June 17, 2016 6:52 PM
Expect new business premium to grow at 15% over the next 5 years, says Deepak Parekh. Expect new business premium to grow at 15% over the next 5 years, says Deepak Parekh.

HDFC Standard Life Insurance and Max Life Insurance Company Ltd are all set to merge with HDFC Standard Life Insurance Co and Deepak Parekh along with Analjit Singh explained the reasoning behind the deal  that will create a behemoth with assets worth over Rs 1 lakh cr. Parekh said that the reasoning behind the deal was that ‘HDFC and Max have strong synergies.’ They were speaking at a  CNBC TV 18 event.

HDFC in a statement had said “HDFC Life, Max Life and Max Financial Services approved entering into a confidentiality, exclusivity and standstill agreement to evaluate a potential combination through a merger of Max Life and Max Financial Services into HDFC Life by way of a scheme of arrangement.”

Here are the  highlights of Parekh’s speech:

Favourable demographics provide a great opportunity for insurance companies, says Deepak Parekh

Expect new business premium to grow at 15% over the next 5 years: Parekh

Renewable premiums are set to grow approximately 10% per year going ahead: Parekh

Deal to form India’s largest private insurer: Parekh

Sumitomo and Standard Life have given go-ahead for merger: Parekh

Product mix of the combined entity will be well diversified: Parekh

Macro environment  in India is very conducive: Parekh

Life insurance penetration is quite low in India: Parekh

Expect due diligence and valuable by next 60 days: Parekh

HDFC Life shareholders are keen to market the company: Parekh

Normal monsoon will be the trigger for the India market: Parekh

Merger will lead to eventual listing as Max is already listed: Parekh

Expect double digit growth from the merged entity: Parekh

It will take about 60 days for due diligence and valuations: Parekh

Analjit Singh statement:

Company has a solvency of 345%: Analjit

Valuation to come in 2 months: Analjit

The merger will be carried out through share-swap: Analjit

 

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