HDFC ERGO expects rich harvest from PM’s crop insurance scheme

HDFC ERGO General Insurance (HDFC ERGO) is hopeful of outpacing industry in revenue growth terms this fiscal too, a top company official said.

The private general insurer, which has recorded 22 per cent growth in revenues till August this fiscal, sees crop insurance as significant growth driver this year.

“This year our significant growth driver will be crop insurance given that the new scheme is in place. We have been a meaningful player (in crop insurance) already in last four years and operating in eight States,” Ritesh Kumar, Managing Director & CEO, HDFC ERGO, told BusinessLine here.

HDFC ERGO plans to scale up its operations on the crop insurance front.

It is widely expected that crop insurance portfolio of general insurers will record a three-fold increase this fiscal and HDFC ERGO is looking to ride on this opportunity thrown up by Pradhan Mantri Fasal Bima Yojana.

Kumar expects the general insurance industry to grow at least 25 per cent this fiscal, noting that industry will this year see its highest growth rate ever.

“This year too, we will grow faster than industry”, he said.

Kumar also said that HDFC ERGO was not immediately looking at any listing, even while noting that it was a shareholders’ call.

On capital raising for business growth, Kumar said the company may have to look at it this fiscal.

Already, HDFC ERGO was raising capital to fund the ₹551 crore acquisition of L&T General Insurance, which has just been completed.

“We are raising capital for the recent acquisition. There could potentially be need for more. We will decide on an optimal route”, he said.

Kumar said HDFC ERGO may also examine the subordinate bonds route now that the insurance regulator has permitted it.

Asked if HDFC ERGO plans to go in for more acquisitions, Kumar pointed out that the company had only recently closed its ₹551 crore deal to acquire L&T General Insurance.

“First we need to integrate this entity (L&T Insurance). If good opportunities presents itself before us, we will certainly look at more. Never say never. As such, there is no reason to close the door (for inorganic growth),” he said.

While HDFC ERGO expects crop insurance to be a significant growth driver, the company sees continued growth in other segments, such as motor and health insurance.

“If you look at our past, we had grown across all segments. So we see a balanced growth this year, too”, Kumar said.

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