Germany-based Ergo Insurance Group and India-based motorcycle manufacturer Hero Group have formed a new joint venture company, Hero Ergo Life Insurance.

Under the proposed agreement, equity will be shared between the two partners and Ergo International will take a 26% share in the Indian joint venture company, which is the maximum permissible limit under the existing guidelines for the insurance sector in India.

The two joint-venture partners will work towards procuring regulatory approvals from the Indian regulator IRDA over the next 10-12 months, with a view to starting operations during the second quarter of 2009. Subject to regulatory approval, both parties have agreed that the initial paid-up capital will be INR2 billion.

Nikolaus von Bomhard, CEO of Ergo’s parent company Munich Re, said: Our tie-up for life insurance will strengthen our primary insurance footprint in the entire insurance sector, that is life, health and non-life business in India.