Page 11 - Insurance Times February 2022

private sector insurers chart their to capture the rural growth as income common man, Jain said government
growth paths. grows and that also necessitates need departments have been asked to iden-
LIC showcased that even after two de- for more savings as well as protection tify laws and rules that can be simpli-
instruments. fied or dispensed with by end of the
cades of private players in the industry,
it still has nearly 65% of new policies LIC dominates rural India with a 71% month and steps to reduce compliance
and is the only one that could capitalise market share, followed by SBI Life at will need to be taken in two lots - one
on the opportunities in rural Bharat, 7% and HDFC Life's 3%, data from the by March-end and the rest by August
with 71% market share while its near- insurance regulator showed. The newer 15. A similar exercise has already led to
nearly 25,000 compliances being re-
est rival and the biggest listed entity companies are relying on digital mode
HDFC Life has just 4%. to expand their reach. duced.
While competition has been intensify- Government to amend FDI Jain said the government was seeking
ing in the insurance industry with pri- to provide a further fillip to startups and
vate sector players getting aggressive policy to boost LIC public expected 50,000 of them to generate
in selling new products, the state-run offer around 20 lakh jobs by the end of 2025.
behemoth pointed out that when it So far, 60,000 startups that are regis-
comes to insurance, it is the renewal of The government is set to amend the tered with the government have gen-
foreign direct investment policy to fa- erated around 6.5 lakh jobs.
policies that matter more than anything
cilitate the mega public issue of Life In-
else.
surance Corporation of India (LIC), LIC IPO may open the
LIC said it is still the largest when it planned for this quarter.
comes to renewal premium, said one floodgates for new retail
of the persons aware of the presenta- While 74% FDI is permitted in insurance
tion. It still seems to be having more sector, the rules do not apply to LIC. investors in stock market
than 63% market share in this segment. Anurag Jain, secretary in the depart- The buzz around the disinvestment of
ment for promotion of industry and in- Life Insurance Corporation (LIC), is get-
The government plans to sell a minor-
ternal trade (DPIIT), said the current ting louder with every passing day. All
ity stake in the state-run insurer before
policy related to the sector will not fa- eyes are peeled for the timelines of the
the end of the current fiscal year. While cilitate the disinvestment process of LIC LIC initial public offering (IPO), which is
there has been no timeline yet on the and, hence, needs to be revised. expected in the fourth quarter of finan-
filing of the IPO offer document or the
pricing, the government is keen on it as "We are working on further simplifica- cial year 2021-22.
tion of the FDI policy. A very important Reports suggest the government may
its other plans for stake sales have hit a
point for further simplification is re-
roadblock. dilute 5% stake in LIC and raise about
quired urgently as we have to do the Rs 75,000 crore, thereby giving the in-
"People asked us this question when the
LIC disinvestment. So, we would be surance behemoth a valuation of Rs 15
industry opened up in 2004-05 and we
coming out with a revised FDI policy lakh crore.
said we will be able to compete in the which will facilitate LIC disinvestment,"
market as well as anyone else," LIC he told reporters here. Colossal demand is expected not only
chairman M.R. Kumar said. "We are from institutional but retail investors as
also stepping up digital marketing and The matter is being discussed with the well. The retail demand for recent IPOs
department of financial services (DFS)
bancassurance. Over the years, the loss has been going through the roof. For
and department of investment and pub-
of market share is only a result of other instance, in this calendar year, the re-
people growing and not about us not lic asset management (Dipam). tail quota of the Rs 600-crore Latent
growing." "We have had two rounds of discussions View Analytics' IPO was subscribed a

While insurance penetration in India has at my level and, now, we have (DPIIT, whopping 120 times, while Paras De-
DFS and Dipam) on the same page. So, fence And Space Technologies' retail
been low, the urban areas have been
we are in the process of drafting those quota was subscribed 113 times.
oversold with many buying more than
four or five polices per individual, but changes in the FDI policy. We will go to Unfortunately, the extent of retail over-
the rural areas have not been served. the Cabinet (for approval)," he said. subscription results in many investors
LIC showcased that with its more than Outlining the government's focus on from this category failing to get even a
1.35 million agents, it is best positioned making life simpler for businesses and single allotment. T

The Insurance Times, February 2022 11