Page 10 - Insurance Times August 2019

LIC’s market share de- LIC offloads 2% in BHEL, Axis Bank
clines for 5th consecutive The LIC has offloaded 2% stake in Axis Bank and Bharat Heavy Electricals each.
As per a regulatory filing, LIC sold 2.004%
year stake or 5.25 crore shares in Axis Bank,

Private players are seemed to give bringing down its total holding in the pri-
tough competition to the insurance vate sector lender to 10.209%. Between
giant of India, LIC as they are using March 21, 2014 and June 20, 2019, the
new-age digital marketing technolo- transaction was carried out in the open
gies. As per the latest data from market. LIC’s holding in Axis Bank fell to 10.2019, following the stake sale.
IRDAI, the market share of LIC in At the same time, in a separate regulatory filing, BHEL said that LIC sold 2.001%
terms of first year premium up to of its holding in the company amounting to 6.96 crore shares through the open
May 31, 2019, was 66.08%, down market. With this, its total holding has come down to 11.701% in BHEL. The
from 67.40% up to May 31, 2018. stake sale happened between April 4 and June 20.
Over the past one year, LIC’s market
share declined marginally. LIC’s LIC to put Rs 30,000 crore in NHAI
share in the overall life insurance For a funding of Rs 30,000 crore in the current financial year, the national high-
business came down from 75.34% in ways authority is tapping LIC. In response to that,
2013-14 to 69.36% in 2017-18. On LIC has given in-principle nod in order to subscribe
the contrary, the market share of 23 to the bonds issued by National Highways Author-
private insurers increased from ity of India (NHAI), as informed by an official.
26.95% in 2013-14 to 30.64% in “We need long-term funds (for NHAI), and this
2017-18. funding arrangement will be for a span of 30
Over the past few years, private in- years,” said the official. He added, “The advantage of insurance funds is that
surance firms say that they have these are long-term.” The official also added that LIC is a sensible choice given
been investing on new-age digital the gestation period of road projects is also long, “Modalities for the arrange-
technologies to make their service ment are being worked out. We will see how we can negotiate the coupon
reached out in semi urban and rural rates,” the official said.
areas. “Our core strategy comprises According to the guidelines by IRDAI in terms of investment by insurance com-
3 Ds – data, digitise and disrupt. We panies, the plan will be firmed up. The move comes as the highways ministry
leverage data to understand the faces stiff targets to raise funds outside of the budgetary allocation of Rs 36,691
behaviour of our customers; we in- crore for FY20.
vest in digitisation to improve opera- NHAI chairman NN Sinha had recently stated that the authority aims to increase
tional efficiencies; we focus on de- Rs 75,000 crore from the market this financial year. In the past, NHAI has sold
veloping disruptive technologies to its AAA rated bonds to the state-owned insurer with an aim to increase around
differentiate ourselves. This has re- Rs 1 lakh crore from LIC. Around Rs 13,500 crore through sale of long-term
sulted in better customer retention,” maturity bonds had been increased by the authority in two tranches to LIC in
said Nipun Kaushal, chief marketing 2017.
officer (CMO) of PNB MetLife.
On the other hand, in the month of June of 2018, NHAI has increased Rs 2,000
As per Chandramohan Mehra, CMO, crores from the insurer.. “This year, there is pressure on NHAI to raise more non-
Bajaj Allianz Life Insurance, along budgetary resources than the budget allocation and LIC is the most sensible
with digital technologies, innova- way to start with. This will hopefully encourage more PSUs and insurance com-
tions in products in compliance with panies to come forward and fund infrastructure projects,” said Vinayak
demands of the millennials has been Chatterjee, chairman, Feedback Infra.
a key factor in terms of growth. Manish Agarwal, lead-infrastructure at PwC said that though the funding plan
“Millennials are looking to meet from LIC comes as a positive for NHAI, the need to attract private investment
multiple life goals, and maximise liv- still remains. “Only when private sector investment comes in the roads sector,
ing benefits. Hence, the whole nar- investors will feel confident that investment will come into other infrastructure
rative has changed,” Mehra said. sectors,” he added.

10 The Insurance Times, August 2019