Life Insurance India - News & Updates

HDFC's profits in Q3 up by 233% post life insurance stake sale

HDFC, which is a leading housing finance company in India and a key stakeholder in HDFC Life, has announced a net profit amounting to Rs.5,670 crore for its third quarter that ended in December 2017. This was a 233% increase over what the company announced for the same period, last fiscal. This extraordinary surge can be attributed to the gains made by the company from selling a part of its stake in HDFC Life in an Initial Public Offering (IPO). The company has also been offering affordable loans, which have also increased the income earned from operations.

Reliance Nippon Life ties-up with Bank of Maharashtra

Reliance Nippon Life Insurance has recently signed a bancassurance agreement with the Bank of Maharashtra. Bank of Maharashtra, which has over 1,880 branches across the country, will help Reliance Nippon Life to further their customer outreach. This partnership will also complement the existing financial solutions offered by the bank, including the savings, protection, and investment solutions.

Reliance Nippon is currently one of the leading private life insurers in India. The company already has a large distribution network with over 700 branches across the country, and more than 10 million policyholders.  

Max Life launches first-ever online ULIP

Max Life, which is one of the leading insurance firms in the country, recently launched a Unit Linked Insurance Plan (ULIP) called Max Life Online Savings Plan. This policy will be available only through online channels. The policy was launched in an effort to help policyholders create long-term wealth and to help them meet key milestones in their lives.

The policy, which comes in two variants, provides maximum returns to customers by way of their Zero Policy Administration and Zero Premium Allocation charges. Policy buyers can also choose any policy tenure between 5 and 30 years and a suitable premium payment term. In terms of the fund options, the insurer offers policy buyers the option to choose from up to five funds, which include debt funds, equity funds, and balanced funds.  

Budget 2018: Proposition made to separate tax exemption limits for Life Insurance Products

The last announcement made, related to the life insurance sector, in a Union Budget was in FY14-15, when the FDI limit was raised to 49%. It is expected that certain changes will be made in regards to the life insurance sector in the upcoming Union Budget 2018.

At present, various financial instruments such as insurance premiums, EPF contributions, etc. are covered under one tax slab of Rs.1.5 lakh. Thus, people are hopeful that separate tax exemption limits will be made for life insurance and pension products alone, in the upcoming Budget.

Also, GST (the Goods and Services Tax) has resulted in insurance premiums increasing for various insurance products, thus making it a less attractive investment option for policy buyers. Policyholders and insurance firms are hopeful that they will see the GST being waived of insurance premiums, in the upcoming fiscal year.

LIC launches Jeevan Shiromani Plan for High Net-Worth Individuals

Life Insurance Corporation of India (LIC) recently launched a new insurance policy called ‘LIC’s Jeevan Shiromani’. The Jeevan Shiromani Plan is a ‘with profit’, limited premium payment, non-linked, money-back life insurance policy that is specifically catered towards high net-worth individuals. It is also reported that the minimum sum assured that a policy buyer can opt for is Rs.1 crore. There is no limit on the maximum sum assured.

The policy can be purchased by policy buyers between 18 and 55 years of age. The policy provides a risk cover against death and also offers a lump sum payout in case the policyholder is diagnosed with any of the critical illnesses mentioned in the policy document.

IRDAI to review Insurance Regulations governing the Life Insurance Sector

The Insurance Regulatory and Development Authority of India (IRDAI) will be reviewing the insurance regulations that are currently in place, in the country. The regulator had set up an eight-member panel which suggested that the investment norms that are currently in place need to undergo a significant change in the future in an effort to improve the returns that are generated by various funds.

The committee also mentioned that the current investment norms are quite restrictive, and proposed that the mandatory proportion of G-Secs in General Annuity Funds, Pension Funds, and the Life Funds should be reduced.

New Business Premium Income of Life Insurance Firms up by 6% in November 2017

The overall new business premium collection of life insurance providers touched Rs.16,995 crore in November this year, against the collection of Rs.16,061 crore during the corresponding period last year. While LIC’s new business premium collection saw a slight drop, the total premiums collected by private insurance firms rose by 32% to touch Rs.4,658 crore this year, against Rs.3,533 crore last year.

HDFC Standard Life Insurance’s premiums rose by 64%. Other life insurance firms that reported a steep increase in the collection of new business premiums include SBI Life Insurance, Max Life, Bajaj Allianz Life, Kotak Mahindra Old Mutual Life, and Birla Sun Life. Between April – November 2017, the cumulative premium collection of life insurance firms came up to Rs.1,22,937 crore.

IDBI Federal Life Insurance kicks-starts 100% Stake Sale

IDBI Federal Life Insurance, which is a three-way joint venture between Federal Bank, IDBI Bank, and Belgian insurance firm Ageas, has launched the process of their 100% stake sale. It is also reported that several players are interested in acquiring the private-sector insurance firm. IDBI Federal Life Insurance has appointed JPMorgan, the global investment bank, to manage the stake sale.

At the end of FY 2016-2017, IDBI Federal Life Insurance had over a million policies, with a total sum assured of Rs.58,654 crores. The company’s assets under management (AUM) amounted to Rs.6,090 crore. The firm operates through its distribution partners IDBI Bank and Federal Bank, which together have over 3,000 branches across the country.

LIC’s Total Premium Income up by 12%, touches Rs.1.48 trillion

Life Insurance Corporation of India’s (LIC) total premium income increased by 12% to touch Rs.1.48 trillion during the 6-month period that ended in September. The life insurance firm’s total net income, during the corresponding period, also increased by 12.6% to hit Rs.2.50 trillion. The company made a profit of Rs.12,374 crore from the sale of equity shares during the same period.

LIC is India’s largest institutional investor, and the company has a balance sheet size amounting to Rs.27.3 trillion. The insurer also purchased equity shares worth Rs.39,224 crore during the first half of FY2017-2018, compared to Rs.17,974 crore last year.

Bajaj Allianz launches Digital Branch Services via Mosambee

Life insurer Bajaj Allianz will be offering digital branch services through Mosambee, which is a handheld device that will help customers pay their premiums, update Aadhaar and PAN detail, key-in contact numbers, procure account statements, check the status of their claims, track the fund value, view their account statement, etc.

The key benefit of Mosambee is that customers can choose to pay their premiums through various payment modes, such as DD, cheque, non-chip based debit and credit cards, etc. Bajaj Allianz will also be launching payment via e-wallets on the digital platform, shortly. The company also launched another digital initiative called ‘BOING’, which is a virtual chat assistant that is now available on the company’s Facebook page and their website.

Edelweiss Tokio receives equity capital infusion of Rs.670 crore

Edelweiss Tokio Life Insurance, a private-sector life insurance company, has received a capital infusion of Rs.670 crore from the company’s joint venture partners Tokio Marine Holdings and Edelweiss Financial Services. Edelweiss Financial Services currently holds a 51% stake in the company, while the remaining 49% is owned by Tokio Marine.

It is reported that the capital infusion will help support the firm’s expansion plans and help in the development of their bancassurance channel. The life insurer is also improving their digital and technology platforms. Edelweiss Tokio Life Insurance had previously received a sum of Rs.527 crore from Tokio Marine in February 2016.

Kotak Life launches Kotak e-Term Plan

Insurance firm Kotak Mahindra Old Mutual Life has announced the launch of its new term insurance plan called Kotak e-Term Plan. The policy comes in three variants – Life Option, Life Plus Option, and Life Secure Option – that offer different coverage options.

Life Option, the most basic of the three variants, offers a risk cover against death. Life Plus Option provides policyholders an additional cover against death caused due to an accident. The Life Secure Option offers an additional premium waiver benefit in case the policyholder suffers from total and permanent disability.

The policy also provides policyholders the option to enhance their coverage at various stages of their life. Further, the nominee can choose to receive the death benefit payout as a lump sum amount, increasing recurring yearly payout, or recurring yearly payout.

LIC issues notices against linking Aadhaar Number with Insurance Policies via SMS

The Insurance Regulatory and Development Authority of India (IRDAI) made it mandatory for policyholders to link their insurance policies with their Aadhaar number, earlier this month. The IRDAI had set 31 December 2017 as a deadline for this. Given this, fraudsters have been circulating messages on social media, asking unsuspecting policyholders to link their Aadhaar by sending an SMS to a certain designated number.

Thus, LIC has issued a notice on their website asking policyholders to beware of such attempts. In order to safely link your policy with your Aadhaar number, you will have to log into your insurer’s customer service portal and key-in certain relevant details. Non-registered users will have to first fill-up a registration form in order to generate a user-specific login ID. Policyholders can also walk into the nearest branch of their insurer with a self-attested copy of their Aadhaar card.

LIC issues notices against linking Aadhaar Number with Insurance Policies via SMS

The Insurance Regulatory and Development Authority of India (IRDAI) made it mandatory for policyholders to link their insurance policies with their Aadhaar number, earlier this month. The IRDAI had set 31 December 2017 as a deadline for this. Given this, fraudsters have been circulating messages on social media, asking unsuspecting policyholders to link their Aadhaar by sending an SMS to a certain designated number.

Thus, LIC has issued a notice on their website asking policyholders to beware of such attempts. In order to safely link your policy with your Aadhaar number, you will have to log into your insurer’s customer service portal and key-in certain relevant details. Non-registered users will have to first fill-up a registration form in order to generate a user-specific login ID. Policyholders can also walk into the nearest branch of their insurer with a self-attested copy of their Aadhaar card.

SBI Life Insurance to cut Term Insurance Premium Rates by December 2017

SBI Life will be reducing the premium charges of all term insurance plans by the end of the current year, in order to increase the firm’s profitability under competitive market conditions. Overall, the insurance firm has been strengthening their market share and has reported a growth of 48.1% in new business premiums for the current fiscal, against what was reported for the corresponding period last year.

The Chandigarh region, which includes the states of Haryana, Himachal Pradesh, Punjab, Union Territory of Chandigarh, and Jammu and Kashmir, has reported an overall growth of 65.8% in its individual new business premiums for the current fiscal. The insurer is looking to strengthen their business operations, showcase their offerings, and enhance customer service by way of the new regional office which was launched in Chandigarh.

HDFC Standard Life stocks up by 34% within 3 trading sessions

HDFC Standard Life Insurance stocks rose over the 400 level within 2 sessions of its market debut, on the NSE and BSE. The insurer’s current market valuation stands at Rs.69,671.19 crore. The company’s IPO, which was open between the 7th and 9th of November, was subscribed 4.90 times. The shares reserved for QIBs (Qualified Institutional Buyers) was oversubscribed by 16.60 times, while shares allotted for non-institutional investors was oversubscribed 2.29 times. Shares for retail investors saw a 94% subscription.

The insurer fixed a price band between Rs.275 and Rs.290 apiece for the IPO. The offer comprised the sale of a combined 1,91,246,050 shares, with HDFC selling a 9.55% stake in the life insurance firm and Standard Life Mauritius selling a 5.42% stake. The insurance firms has a pan-India reach, with around 414 branches across the country and 16,544 employees.

India Post bets on Postal Life Insurance and Rural PLI domains

India Post has made a big bet on its Postal Life Insurance (PLI) and Rural PLI businesses. The business turnover in Andhra Pradesh is expected to increase to 20% from the current 10-12%, by the end of this financial year. PLI was originally launched for the Posts and Telegraphs employees, but started to extend to cover Central and State government employees post India’s Independence. Rural PLI was launched in the 1990s in order to make insurance accessible to the rural sector. By way of PLI’s increasing demand, India Post is looking to bring certain sections of society like registered professionals, government school teachers, etc. under their reach.

Bajaj Allianz launches New Digital Platform – Life Assist

Life insurance firm Bajaj Allianz has launched a new digital platform called Life Assist, which will provide 24x7 instant life insurance solutions to prospective policy buyers. With the platform providing the experience of a virtual branch, customers can access all services that are available at regular company branches digitally, round-the-clock. With Life Assist, customers can edit their profiles and contact information, modify their KYC details, check their claim status, make top-up premium payments, opt for riders, switch funds, revive policies that are lapsed, etc.

The company also launched another online initiative called BOING, which is a 24x7 online chat assistant. BOING responds to user queries instantly and assists them with various services. Since its launch, chat assistant BOING has had around 27,000 visits from customers looking to issue account statements.

HDFC Standard Life IPO subscribed 4.89 times on Day 3

HDFC Standard Life’s Rs.8,695 crore IPO was subscribed 4.89 times on the last day of the bidding process. The insurer’s IPO received 1,07,50,87,700 bids against an issue of 21,97,59,218 equity shares. The shares that were allotted for institutional buyers and non-institutional buyers were subscribed 16.60 times and 2.29 times, respectively. The shares reserved for retail investors was subscribed 91%.

Prior to their IPO that launched on 7 November, HDFC Standard Life raised a sum of Rs.2,322 crore from anchor investors. Key stakeholders HDFC Ltd. and Standard Life Mauritius will be selling a 9.55% and 5.42% stake in the life insurance firm, respectively. The promoters are expecting to raise around Rs.7,500 crore from the IPO. It is reported that the shares that were offered in the IPO will be listed on the NSE and the BSE.

HDFC Standard Life IPO Oversubscribed by 17% on Day 2 of Bidding

HDFC Standard Life Insurance’s Rs.8,695 crore IPO was oversubscribed by 17% on Day 2 of the company’s bidding process. The company received 25,73,36,050 bids against the issue of 21,97,59,219 equity shares. The shares reserved for institutional buyers saw the highest demand, with the shares reserved for employees next in line. The shares that were allotted for non-institutional investors had a 49% subscription. Equity shares that were reserved for retail investors and shareholders saw a subscription of 36% and 15%, respectively.

The bidding process which started on 7 November 2017 will close on 9 November 2017. The price band set by the insurer is Rs.275-Rs.290 apiece. By way of the IPO, joint venture partners HDFC and Standard Life will be selling a 9.52% and 5.4% stake in the life insurance firm, respectively. The minimum bid lot per person is fixed at 50 shares, and in multiples of 50 thereafter.

ICICI Prudential looks to invest in IT and Pharma sectors, after Telecom bet pays off

Fund managers at ICICI Prudential Life Insurance are looking to invest in the Indian technology and pharmaceutical sectors after their very risky bet on the telecommunications sector paid off. It is reported that ICICI Prudential Life’s Chief Information Officer, Manish Kumar, in a very unorthodox fashion, kept purchasing shares in the telecommunications sector despite plunging profits and a price war which made other investors stop investing in the said sector.

During that period, ICICI’s Prudential Life’s assets under management (AUM) increased by about 16%, and currently amount to Rs.1.3 trillion or $20 billion. Around 54% of the company’s assets are under debt, as per the requirements of the Insurance Regulatory and Development Authority of India (IRDAI) and the preferences of the company’s unit-linked policyholders.

HDFC Standard Life’s IPO has a good start – 46% Shares Subscribed on Day 1

HDFC Standard Life’s Rs.8,695 crore IPO was subscribed 46% on the very first day of bidding. The company is selling their equity shares at a price band of Rs.275-290. Investors are required to purchase a minimum of 50 shares, and in multiples of 50 thereafter. The issue which started on 7 November will close on 9 November. Earlier this week, the life insurance firm raised a sum of Rs.2,322 crore from anchor investors, at the upper end of the established price band.

HDFC Standard Life is a joint venture between insurance firm Standard Life and HDFC. Before the IPO, HDFC had a 61.53% stake in the insurance firm, while Standard Life had a 34.94% stake. The remaining shares are held by shareholders and the Azim Premji Trust. HDFC Life is currently the third-largest private-sector life insurance firm in the country.

Demonetisation aids Life Insurance Industry’s Growth

HDFC Standard Life Insurance will be the third life insurance firm to get listed on the bourses. It will also be the first IPO (initial public offering) from the HDFC umbrella after the HDFC bank's stock market launch in 1995. HDFC Standard Life Insurance will open its Rs.8,695 crore stock market launch on November 7 of this year for subscription with a price belt of Rs.275 to Rs.290 per stake. The equity shares will be listed on the NSE (National Stock Exchange) and the BSE (Bombay Stock Exchange).

The IPO is offering 29,98,27,818 equity shares of the firm and will close on November 9. The HDFC has offered to sell 19,12,46,050 of their shares while Standard Life has proposed to sell 10,85,81,768 of their shares.

The offer includes reserving up to 21,44,520 shares to be purchased by the HDFC Life’s employees, up to 8,05,000 shares have been reserved for HDFC employees who are eligible and up to 2,99,82,781 shares are reserved for HDFC stakeholders.

Demonetisation aids Life Insurance Industry’s Growth

The demonetisation that happened last year has provided a large boost to the life insurance sector in terms of the premium collection. In November 2016, the total premium collected by insurance firms came up to a total of Rs.16,061 crore, which was a 113% increase from last year’s premium collection and a 45% increase from the previous month’s.

It is reported that the life insurance industry grew at an 18% rate in the first half of FY17, which then increased to 23% during the next half of the fiscal year. Another benefit of demonetisation was that many people, including residents of Tier-2 cities, shifted from traditional premium payment methods to paying their premiums through digital means. This has in-turn resulted in a reduction of unclaimed funds and has helped life insurance firms step-up their automation process.

HDFC Standard Life to Attract Long-term Investors

HDFC Standard Life intents to raise up to Rs.8,695 crore from the primary market to provide liquidity to their promoters. The IPO is highly priced compared to the listed peers including ICICI Prudential Life Insurance. HDFC Standard Life is India's third-largest private sector life insurance firm with 16.5% share of the total private sector premiums in the financial year 2017. HDFC Standard Life holds 17.2% of the total market share hence ranking second overall with respect to the new business premium. HDFC Standard Life’s VNB margin is 22% in FY17 in comparison with 10% - 19% for some of it’s peers.

The firm's business mix seems to be more balanced with pure protection products that form around 26% of NBP and the proportion in under 5% for the peers. The total income of HDFC Standard Life increased to Rs.30,554.4 crore between FY2013 and FY2017. The company also witnessed a remarkable growth in its net profit that increased to Rs.886.9 crore. A higher proportion of such products reduces exposure to market volatility.

Vikas Seth appointed as Bharti AXA Life Insurance’s new Chief Executive Officer (CEO)

Bharti AXA Life Insurance, one of India's leading insurance companies and a joint enterprise between Bharti Enterprises and AXA announced the appointment of Vikas Seth as their CEO yesterday. Seth has more than 21 years of experience in various industries such as life insurance, telecom, and FMCG. He worked with the Aditya Birla Group for approximately 10 years, covering different roles prior to joining Bharti AXA Life.

He also served as the Chief Distribution Officer for Birla Sun Life Insurance, and was responsible for Agency Sales Force, Bancassurance, Corporate Agency and Broker channels. He began his career with the ESSAR Group, followed by Amway and then ICICI in financial services sector. As the new CEO of Bharti AXA Life, Vikas will be responsible for managing the overall business, driving new partnerships, tie-ups and the firm's growth.

HDFC Standard Life sets Price Band for IPO at Rs.275 to Rs.290

HDFC Standard Life is the fifth insurance firm to launch its IPO this year. The insurer has set a price band between Rs.275 and Rs.290 apiece for its Rs.8,695 crore IPO, which will open on 7 November 2017. The company’s Initial Public Offer (IPO) will close on 9 November 2017 and will be listed on 17 November 2017. Individuals interested in bidding will have to bid for a minimum of 50 shares, and in multiples of 50 thereafter.

Out of the 29.98 crore shares on offer, 3.29 crore shares are reserved for employees of HDFC and HDFC Standard Life and for shareholders of HDFC. The remaining shares are for the public. HDFC Standard Life is a joint venture between HDFC and Standard Life. The insurance firm has over 414 branches across the country with around 16,544 employees.

HDFC Standard Life to Launch IPO on 7 November

Life insurance firm HDFC Standard has announced that it will launch its IPO on 7 November. The key joint venture partners of the life insurance firm are HDFC Ltd and Standard Life Mauritius. HDFC Ltd will be selling 9.55% of its stake in the insurance company, while Standard Life will be selling 5.42% of its stake.

Anchor investors can start subscribing to the firm’s issue from 6 November, and the public can start subscribing from 7 November. The IPO is expected to close on 9 November. It is reported that the company’s promoters will be earning around Rs.7,500 crore from the IPO. Currently, HDFC has a 61.41% stake in the company, Standard Life has a 34.86% stake, and the remaining shares are owned by company employees and PremjiInvest.

ICICI Prudential reports a Profit of Rs.421 Crore in Q2

Private insurance firm ICICI Prudential has reported flat growth in its second quarter. The company made a net profit of Rs.421 crore this quarter against the Rs.418 crore that it made last year. The firm’s shares also increased from 0.19% to Rs.390.80. ICICI Prudential Life Insurance is currently focussing on its ULIPs (Unit Linked Insurance Plans). Up to 80% of the firm’s new business premium was contributed by ULIPs. The company’s new business margins also reportedly increased from 10.7% last year to 12.6% this year. While the company witnessed a 28% growth of its protection products this quarter, it was the savings products that contributed to the growth of the annualised premium income the most.

General Insurers’ Gross Premium Increases by 13.6% to touch Rs.17,530.64 Crore

The IRDAI (Insurance Regulatory and Development Authority in India) has reported that the gross premiums of general insurance firms in India have risen to Rs.17,530.64 crore this September. The same companies had collected Rs.15,428.17 crore as premium, last September. The premium collection of Public Sector companies increased from Rs.9,163.48 crore last year to Rs.9,812.27 crore this September. Whereas, premiums of private sector companies increased by 23% to touch Rs.7,718.37 crore this year.

Premiums of standalone health insurance firms have also increased by 42.7% to touch Rs.635.88 crore. Also, the total premiums collected by general insurance firms between April to September 2017 increased by 19.46% to Rs.72,564.42 crore. Private sector non-life insurance companies had earned a total of Rs.34,956.86 crore, and public sector firms had earned around Rs.37,607.56 crore, during the same period last year.

Reliance General Insurance files DRHP for IPO with SEBI

Reliance General Insurance has filed its draft red herring prospectus (DRHP) with SEBI (Securities and Exchange Board of India), seeking approval for its IPO. As per the DRHF, the company is planning to sell up to 16.77 million shares in order to raise capital. The company will use these proceeds to augment its solvency margin and meet any future requirements for capital.

The non-life insurance company has a host of insurance product in various sectors, such as motor, health, weather and crop, marine, and fire and engineering, on offer. Reliance General Insurance is the second private sector insurance firm, from the general insurance sector, to go public.

SBI Life Insurance to Open a Branch Office in Bahrain by December 2017

Insurer SBI Life will be foraying into the Middle Eastern insurance sector by opening a new branch in Bahrain by December 2017. It is reported that the company has received the due regulatory nod from the IRDAI (Insurance Regulatory and Development Authority of India) and the Central Bank of Bahrain. The company is aiming to use State Bank of India’s Bahrain branch to service its insurance products initially. The insurer will also tie-up with local banks in Bahrain later. While the life insurer is mainly targeting NRIs, they will also serve Bahrain nationals and other individuals living in the country. SBI Life is a joint venture between State Bank of India and BNP Paribas Cardif.

SBI Life Insurance’s $1 Billion IPO Opened to the Stock Market on Tuesday

SBI Life made its debut in the stock market on Tuesday. The premium was expected to be around Rs.20 – Rs.30. SBI Life insurance is a joint venture between BNP Paribas Cardif and State Bank of India. The firm’s Rs.8,400 crore IPO was oversubscribed 3.58 times, between 20 September to 22 September. While the shares that were reserved for qualified institutional buyers were oversubscribed 12.56 times, the shares meant for retail and non-institutional investors received an 85% and 70% subscription, respectively. The issue price was set at Rs.700 apiece.

SBI Life Insurance is the largest private life insurance firm in India, in terms of New Business Premiums. The company has maintained this position since FY10. Brokerage firms and analysts were of the opinion that the company’s premium valuations were justified since the firm has seen a high renewal premium growth from FY14 to FY17. Further, the firm’s steep growth over the past few years, brand name, and strong presence in the market is expected to positively impact the insurer.

ICICI Lombard’s Shares Gain Momentum – Trading above Issue Price

ICICI Lombard has made its debut on the bourses today. While the company had a slightly tepid start, it soon recovered. The general insurance firm’s shares have gained momentum, and are being traded at Rs.671 and a high of Rs.672. The issue price was Rs.661 apiece. The company’s initial offer was subscribed 3 times between 15 September and 19 September.

ICICI Lombard is a joint venture between Fairfax Financial Holdings and ICICI Bank. While stakeholder ICICI Bank sold around 317.6 shares to raise Rs.2.099.40 crore, Fairfax Financial Holdings sold 544.8 crore shares to raise Rs.3,601.50 crore. ICICI Bank and Fairfax have diluted 7.15% and 12.27% of their stakes in the general insurance company, respectively.

ICICI Lombard was launched in the year 2001, and is the largest, private sector, general insurance firm in India. The insurance company has a market share of 20.2%, as on the first quarter of FY18. The company’s franchise network, multi-channel network for distribution, and exhaustive product portfolio has helped the insurer retain its leadership position in the market since 2004.

SBI Life Insurance IPO oversubscribed 3.58 times by Final Day of Bidding

SBI Life launched its IPO in an effort to raise Rs.8,400 crore. By the last day of bidding (22 September), the company’s IPO was oversubscribed by 3.58 times. The insurer is expected to announce the allotment by 27 September 2017. SBI Life’s IPO is one of the largest IPOs to be launched in the last seven years. The life insurance firm received around 29.5 million bids, which was 3.58 times over the company’s offering of 8.8 million shares.

SBI Life Insurance’s key joint venture partners, BNP Paribas Cardif and State Bank of India, are selling a 4% and 8% stake in the company, respectively. The price band for each share was fixed at Rs.685 – Rs.700 apiece, by the insurer. Other insurance companies that have filed for IPO include HDFC Standard Life, New India Assurance, and GIC-Re. All three firms together are expected to raise over $4 billion through their IPOs.

Canara HSBC OBC Life targets a New Business Premium Collection of Rs.850 Crore

Insurance firm Canara HSBC Oriental Life has witnessed a steep growth in the past fiscal years, and is currently targeting a 40-50% increase in its new business premium for FY 2017-2018. While the company is targeting a collection of Rs.850 crore, they are hoping to reach the Rs.1,000 crore mark, this financial year. The company has already reached a break-even point, and is also generating a profit.

Due to the firm’s bancassurance model, the company has had profits in excess of Rs.100 crore, every year, for the last three financial years. The insurance firm has sufficient capital, a 400% solvency ratio against the standard 150%, and an 83% persistency ratio. It is reported that the company might also list its shares, in the next three to four years, if there is a need to dilute the firm’s shareholding.

Max Life Insurance and Birla Sun Life Initiate Talks over Possible Merger

Insurers, Max Life Insurance and Birla Sun Life, are holding talks over a possible merger between the two to create a new insurance giant. However, these discussions have just started, and might not lead to an actual merger. It is reported that the insurers are holding discussions at the shareholder level, and not yet at the board level.

Birla Sun Life is a joint venture between Sun Life and Aditya Birla Capital Limited, while Max Life’s holding company is Max Financial Services. It is reported that a plain merger of the respective firms’ life insurance businesses and a change in shareholding is being explored. Insurer Max Life has a 7.9% share in the market and Birla Sun Life has a 7.1% market share.

The insurers are holding talks after the reported merger between HDFC Standard Life Insurance and Max Life Insurance was called off in the end of July, after failing to receive regulatory approval.

SBI Life’s IPO to Open Today – Long-Term Subscription Recommended

SBI Life Insurance Initial Public Offers of Rs.8,400 crore will open today. The company has priced its shares at Rs.685 – Rs.700 apiece, a fair price, according to analysts. The insurance firm’s IPO will be the largest offering that’s hit the market since October 2010, when Coal India Ltd. launched its IPO. SBI Life’s IPO is also the fourth-largest, as per the issue size.

The firm is a joint venture between State Bank of India and BNP Paribas Cardif S.A., and the investors will sell 8% and 4% of their total stakes in the firm. SBI and BNP Paribas Cardif are expecting to earn Rs.5,600 crore and Rs.2,800 crore, respectively. Based on the company’s leadership position and strong growth over the past fiscal years, the company is expected to attract investor interest. Given the company’s mature valuations, analysts have recommended that investors opt for long-term subscription.

SBI Life is the largest private, life insurer in India. Between 2015 and 2017, the company’s new business premium increased at a compounded annual growth rate of 35.45%, the highest among its peers. The insurance giant was established in the year 2001, and has a range of insurance products on offer for customers.

National Insurance Company expects to Raise Rs.5,000 Crore from its IPO

National Insurance Company (NIC), a general insurance firm, is expecting to launch its IPO by March 2018. The company is expecting to raise a sum of Rs.4,000 to Rs.5,000 crore through its IPO. It is also reported that the insurer will be looking at supporting its capital base to maintain the solvency margin, with the amount it raises.

The insurance firm has submitted a request to the Insurance Regulatory and Development Authority of India (IRDAI) last week, after receiving due clearance from the government. The government is expected to come to a decision about the form and amount of stake dilution. National Insurance Company has been able to increase its solvency margin by raising its net worth. While the company collected premiums worth Rs.14,256 crore in the last financial year, they are targeting a premium collection of Rs.16,000 crore for the current financial year.

ICICI Lombard’s IPO Valuation is Steep, yet Remains a Safe Option

Insurer ICICI Lombard is set to put up equity shares worth Rs.5,700 crore on offer, in the primary market. This move will provide liquidity to the insurer’s stakeholders – FAL Corporation and ICICI Bank. While investors are concerned about the valuation being slightly steep, the company, which is a leader in the Indian general insurance industry, has proven its mettle with consistent growth, strong management, and dividend payments. These factors make it a viable choice to investors looking to invest in the general insurance business.

The company, which was set-up in the year 2000, is currently the largest private-sector, general insurance firm in the country. Its gross direct premium income, for FY17, comes up to Rs.10,725 crore. The company has a varied product portfolio and has reported the quickest turnaround time for claims, having paid 94.4% claims within a single month. The company has also seen its assets doubling between 2013 and 2017. The insurer’s RoE (return on equity) for FY17 was 17.2%, which was more than the competitors’ average RoE of 14.4%.

ICICI Lombard’s IPO to Open this Week

ICICI Lombard, an ICICI Bank subsidiary, will launch its IPO worth 8,62,47,187 shares, between the 15th and 19th of this month. It is reported that ICICI Bank will be putting 3,17,61,478 shares on offer, and FAL Corporation, an investor, will make an offering of 5,44,85,709 shares. Further, 43,12,359 shares will be reserved for shareholders of ICICI Bank to purchase.

ICICI Lombard received a go-ahead from SEBI (Securities and Exchange Board of India) for launch of its IPO earlier this week, and has set a price band of Rs.651 to Rs.661 as its IPO offer. The company, which is a joint venture between the internationally-based Fairfax Financial Holdings and ICICI Bank, is currently the biggest private-sector general insurance firm in the country.

IndiaFirst Life Insurance launches Chatbot – IRIS (IndiaFirst Responds)

IndiaFirst Life Insurance, an insurance firm that is promoted by Andhra Bank, Bank of Baroda, and Legal & General, has recently launched its chatbot named IRIS (IndiaFirst Responds). The bot comes complete with various functions, such as enabling customers to view product descriptions, notices, premium statements, application status, fund value inquiries, and surrender value inquiries.

The main purpose of launching this chatbot was to modernize the traditional process, enhance the user journey and customer experience, reduce dependence on call centres for basic queries, etc. The company has always strived to maintain a ‘customer first’ approach and simplify processes by way of using innovative technology. The chatbot will empower the company’s sales force to meet the requirements of customers, in real-time.

The insurer has also launched a solution, which will enable their sales team to receive correct responses to any queries that they may have, in real-time, through an app.

SBI Life receives approval from SEBI for Rs.8,400 crore IPO

SBI Life Insurance has now received approval from SEBI (Securities and Exchange Board of India) to launch its IPO, which will be worth Rs.8,400 crore. The launch is expected to happen in the third week of September. The insurer’s IPO will include 12% of their equity capital, which will come up to around 120 million secondary shares.

The insurance firm’s joint venture partners, State Bank of India and BNP Paribas, own a 70.1% and a 26% stake in the company, respectively. While SBI will sell around 80 million shares, BNP Paribas will sell 40 million shares. SBI Life’s other key stakeholders, Temasek Holdings and KKR Asian Fund, own another 1.95% stake in the company. Other companies that are leads on the IPO are Deutsche Bank, JM Financial, SBI Capital, Axis, Citigroup, BNP, Kotak, and ICICI Securities

Jeevan Utkarsh Policy Launched by LIC

Life India Corporation of India (LIC) has recently launched a new plan – the Jeevan Utkarsh policy. This is a single premium plan and offers members the dual benefit of a risk cover and a savings option. The premium payable will vary based on the sum assured opted for and the age at which the member purchases the policy. The minimum and maximum age at entry is restricted to 6 years and 47 years, respectively. This is an annual policy with loan facility. While the minimum sum assured that can be opted for is Rs.75,000, there is no restriction on the maximum sum assured. The policy can be purchased between 6th September and 31st March.

SBI Life Insurance looks to raise Rs.8,000 crore from IPO

SBI Life Insurance is awaiting approval from SEBI (Securities and Exchange Board of India) and IRDAI (Insurance Regulatory and Development Authority of India) to launch its IPO this month. The company expects to raise a sum of Rs.8,000 crore from this.

Earlier this year, SBI Board members held a meeting to approve the IPO and to explore possibilities of whether SBI’s stake in SBI Life could be diluted through the IPO. Further, the insurance firm also chalked up plans to sell up to 12% of its equity shares, by way of the IPO.

Between the JV partners, SBI will now be selling 8% of its stake in SBI Life and BNP Paribas Cardif will be selling 4% of its stake. Another 3.9% of the stake in SBI Life was sold at the end of last year to a Singapore Investment firm, by the parent company. It was reported that this deal was worth Rs.46,000 crore.

LIC completes 61 years since its Inception

Life Insurance Corporation of India (LIC), India’s only public-sector insurance firm, has recently completed 61 years, since it began its operations in 1956. The insurance company has always aimed to spread awareness of life insurance products to the general public, and has set and crossed several milestones in the insurance sector. The firm had 23 plans on offer under its Individual Business category, during the financial year 2016-2017, and has added four more policies to its offering this year.

When the firm was set-up in 1956, it had an initial capital of Rs.5 crore. However, it now has assets over Rs.25 lakh crore with Life Fund, which amounts to a sum of Rs.2323802.59 crore. The insurer has over 4,897 offices across the country, employs around 1.15 lakh individuals, has 11.31 lakh agents, and has over 29 crore plans. Between 2016 and 2017, the insurer reported a growth of 27.22% in its New Business of First Year Premiums. The company also has one of the best claim settlement ratios in the country, and has settled around 99.63% of death claims and 98.34% of maturity claims.

.LIC had also encouraged and initiated technological reforms to improve the value of its services and offerings. The company’s technologically-forward initiatives include an SMS-based helpline channel, SMS alerts on any transaction, digital premium payment by way of mobile wallets, NEFT, debit cards, credit cards, etc. LIC is also actively involved in social responsibility initiatives and had setup the LIC Golden Jubilee Foundation in the year 2006. In addition to its own schemes and services, the Foundation also actively supports independent NGOs.

GST to make Life Insurance Products more Expensive

The increase in tax rates from 15% to 18% is expected to make purchasing life insurance policies more expensive. Life Insurance Corporation of India (LIC), a public-sector insurance firm, has been making requests to the GST Council to reduce the tax rates back to the original 15%, and has also urged consumers to make appeals to the government for the same.

While the rate of penetration of life insurance products, especially in rural India, is quite low, LIC has been spearheading the effort to provide life insurance policies. The company initially started with a capital of Rs.5 crore, and currently has total assets amounting to Rs.25 lakh crore with a life fund of Rs.23 lakh crore. It is reported that, in the last fiscal, the company collected an approximate of Rs.124396.27 crore as premium, which amounted to approximately Rs.340 crore. LIC’s share in the market is around 71.07% in terms of premiums and 76.09% for number of policies.

The company had a claim settlement ratio of 98.34% for maturity claims and 99.63% for death claims. The year 2016-2017, saw the insurance firm settling around 215.58 lakh claims, which amounted to a total of Rs.1.12 lakh crore. Currently, LIC has around 1.15 lakh employees, over 29 crore policies, 4,897 offices, and 11.31 lakh agents, across the country.

Indian Insurance Companies to use Blockchain to ease Policy Registration

Hailed as a breakthrough in the insurance industry, 13 insurance companies in India have collaborated to use blockchain technology to ease the policy registration process and prevent duplication of customer information. A blockchain is much like a decentralized and distributed register, which will hold customer information digitally.

The main purpose of using this technology is that it will help insurers reduce the costs that they would otherwise incur by conducting tests, performing medical and financial underwriting, and storing individual records separately. The technology will also help companies detect any claims that are fraudulent in nature. It is expected that once this blockchain technology evolves, it will lead to improved efficiency and reduction of costs for all parties involved.

EY (Ernst & Young) will be aiding this transition for Indian companies through its partnerships with different technology firms. Various platforms, such as Hyper Ledge, Corda, etc. will be used for this. While the blockchain will hold all relevant customer data, customers are given the option to pull out their data from the system, anytime. However, the 13-member group is certain that this move will only lead to increased transparency and reduced costs, and are hoping that more Indian insurance firms will join them, in the future.

Indian Insurance Companies to use Blockchain to ease Policy Registration

Hailed as a breakthrough in the insurance industry, 13 insurance companies in India have collaborated to use blockchain technology to ease the policy registration process and prevent duplication of customer information. A blockchain is much like a decentralized and distributed register, which will hold customer information digitally.

The main purpose of using this technology is that it will help insurers reduce the costs that they would otherwise incur by conducting tests, performing medical and financial underwriting, and storing individual records separately. The technology will also help companies detect any claims that are fraudulent in nature. It is expected that once this blockchain technology evolves, it will lead to improved efficiency and reduction of costs for all parties involved.

EY (Ernst & Young) will be aiding this transition for Indian companies through its partnerships with different technology firms. Various platforms, such as Hyper Ledge, Corda, etc. will be used for this. While the blockchain will hold all relevant customer data, customers are given the option to pull out their data from the system, anytime. However, the 13-member group is certain that this move will only lead to increased transparency and reduced costs, and are hoping that more Indian insurance firms will join them, in the future.

HDFC Life’s IPO to Test its Success on a Premium Valuation

Last year’s merger deal between Max Life and HDFC Life Insurance saw HDFC Life being valued at Rs.45,000 crore. While the deal between the two companies was called off, HDFC Life has decided to go ahead with an IPO (initial public offering), and the insurer’s promoters are expecting the valuation to match, if not exceed, last year’s valuation figure, considering how the insurer’s value has only increased to Rs.12,290 crore for the current fiscal.

While final valuations may vary based on what is determined by merchant bankers and shareholders at the time of the initial public offering, HDFC Life is not wrong in expecting this valuation. Firstly, when compared to ICICI Prudential Life Insurance, HDFC Life has a more superior insurance portfolio. 53% of HDFC Life’s product offering comprises of traditional policies, unlike ICICI Prudential Life’s product portfolio, which includes a 74% share of market-linked products.

HDFC Life also has a stronger franchise. The insurer’s new business premiums are increasing at an annually compounded rate of 17.8% for the last five years, and is the currently the highest in the market. The insurer’s stocks are also expected to be cheaper than ICICI Prudential Life Insurance, since HDFC Life trades at 3.7 times its embedded value.

While ICICI Prudential’s stocks dropped 11% on the day of listing despite being launched at a discount, the stock prices have steadily increased since then and the stocks are currently valued at Rs.427.15 per share. ICICI Prudential’s success is guaranteed to play at hand in HDFC Life’s success on the day of listing. It is also expected that if not for the many factors and metrics to its credit, the strongly-performing market will help HDFC Life’s IPO performance this year.