HDFC Ergo General Insurance, the insurance arm of mortgage lender HDFC, has acquired L&T General Insurance for Rs 551 crore, the first such consolidation in India’s crowded general insurance sector, which currently has 29 players. L&T General Insurance had reported gross earned premium (GEP) of Rs 483 crore for the last financial year, which puts the deal value at 1.14 times of the GEP.
L&T General Insurance is a wholly-owned subsidiary of infrastructure and engineering major Larsen & Toubro. The move marks an exit from the insurance business for the infrastructure behemoth. The company received licence to operate general insurance in 2010 and it has not been able to break even since then. It reported Rs 102 crore loss for 2015-16.L&T had invested Rs 705 crore by way of share capital in L&T General Insurance, and the sale means it is exiting the business at a loss of Rs 154 crore on its investment.
So let’s do:
1. HDFC Ergo buys _______ Insurance for Rs 551 crore.
Source – The Economics Times