The Kolkata-based Non-Profit Insurance Company will announce an initial public offering (IPO) on March 31 next year or the end of the current fiscal year. As reported by Asia Insurance Review, Thursday (6/7/2017), if approved, it means NIC will become the third government insurance company listed on the March exchange, after GIC Re and The New India Assurance, both of which have appointed bankers. to handle their initial public offering.
“We are waiting for approval from the government,” said Sanat Kumar, Chair and Managing Director of NIC. He said the company’s preference for an IPO took place in the current financial year, “now our capital position is comfortable”.
NIC has posted a 190% solvency margin above the regulatory minimum of 150%, the company announced when it released its financial results for the fiscal year ending March 2017 (FY2017). In contrast, it has reported a solvency ratio of 126% a year ago which has led the industry regulator, IRDAI, to direct insurance companies to take corrective action to improve their solvency position.
Kumar attributes the current improved solvency ratio to reduced exposure to lost group healthcare businesses, pricing of healthcare products and motorcycles, and decreased subordinated debt. The company’s net value increased 9% to INR9,544 crore (US$1,473 million) at the end of March from INR8,764 crore last year. FY2017 NIC gross premium jumped 18.8% to INR 14,282 crore compared to FY2016. However, net profit fell to INR49 crore for FY2017 from INR151 crore for the previous fiscal year.
The combined ratio stands at 133.7%, and the underwriting loss averaged INR3,680 crore for FY2017 compared to INR3,633 crore for FY2016. In January this year, the Cabinet approved a list of shares of five state-owned general insurance companies. Apart from GIC Re, New India and NIC, the other two insurance companies are Oriental Insurance and United Insurance. Currently, the only insurance company listed in India is ICICI Prudential Life Insurance which floated last year.