In what could set the stage for a spate of consolidation moves within the general insurance industry, ICICI Lombard recently entered into an agreement with Bharti AXA General Insurance to acquire the latter’s non-life business. Bharti AXA GI’s non-life insurance business will be demerged into ICICI Lombard.

The all-stock deal is pegged to make ICICI Lombard the third-largest general insurance player (in terms of gross direct premium income or GDPI), from being the fifth currently.

The deal, of course, hinges on various regulatory approvals that could take time.

While the deal could bring in long-term revenue and cost synergies, an expensive deal price against Bharti AXA’s weak profitability metrics (loss-making in FY20), the ability of ICICI Lombard to leverage Bharti AXA’s bancassurance tie-ups and optimise cost structure (Bharti AXA has a high opex ratio) are some concerns around the transaction.

Also, ICICI Bank’s stake in ICICI Lombard would fall to

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