When two insurers sign a merger deal, the new insurer (the one who acquires) protects existing customers from all infections. “The health insurance Policy sold by an insurance company remains intact in all aspects including features, premium prices and terms and conditions when merged and acquired by another insurance company. “The Insurance Regulatory and Development Authority of India (IRDAI) regulator also plays an important role in ensuring that existing customers and existing policies are not affected by the transition,” said Naval Goel, Founder and CEO, PolicyX.com.
Let us assume that the insurance company (which acquires) changes the existing health policy in terms of terms and conditions or premium prices or also plans to withdraw it for any reason whatsoever. In this case too, changes are made only for new customers, with existing customers continuing to enjoy the same policy benefits that they enjoyed before mergers and acquisitions. amalgamation of HDFC Life And Exide Life Insurance is the latest to hit the headlines. Earlier, general insurance companies were aggressively taking this route. For example, Paytm acquired Raheja QBE, HDFC Ergo acquired Apollo Munich, Sachin Bansal acquired DHFL General Insurance, and ICICI Lombard acquired Bharti AXA General. Goyal said, “Customers are protected from any adverse effects of mergers and acquisitions. There are around 25 life insurance companies and 29-30 general insurance companies where very few players have gone for merger. Presently, there is no monopoly scenario. Where insurance companies can rule over customers.”
Understanding the positive impact of mergers and acquisitions, Sanjeev Bajaj, J.T. The chairman and MD of Bajaj Capital said that policyholders generally benefit from these deals. “When a merger or acquisition occurs, large insurance companies take over smaller companies with fewer capabilities and skills and improve their service and delivery. This process ultimately means that the industry has a digitally advanced approach. There will be major insurance companies with strong capability to provide complete services to policyholders including capabilities, superior products and hassle free claim settlement process.”
Mergers and acquisitions also do not significantly change the policy selection process. “The basics of selecting the right insurer will remain the same where customers need to evaluate the product suite offered by different companies, the service, affordability and features offered by each insurance company to their existing customers. However, the challenge may be that the insurance industry will only have better options to choose from in better scenarios.”
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