Page 11 - Insurance Times August 2021

of insurance companies that are gov- tion plans to audit its half-yearly ac- According to sources, the corporation
erned by the Companies Act on the counts for the period ended Septem- has fully provided for these loans and
exchanges, the official added. Although ber 2021. Traditionally, the corpora- the sale would improve the quality of
several changes were made in the LIC tion has been publishing only full-year its portfolio. Sources said that it is not
Act to align the insurer with the provi- accounts. The half-yearly accounts are selling the entire portfolio of default
sions of the Companies Act for its list- likely to include the embedded value - debt, but is doing so in a phased man-
ing, it is still a corporation, he said. a valuation method unique to insur-
ner.
The markets regulator, Securities and ance companies that includes the net
Exchange Board of India (Sebi), allows present value of future earnings from Arogya Rakshak insurance
listing of corporations, but an exemp- policies. LIC has appointed Milliman as
tion will have to be sought from Irdai, the actuary for the process and EY as plan launched by LIC
he said. the advisers. The Life Insurance Corporation of India
The corporation is simultaneously en- (LIC) has introduced Arogya Rakshak,
The discussions have started as the
gaged in the recast of its capital base a non-linked, non-participating, regu-
government prepares for India's larg-
est IPO, which is expected to shore up that will enable the distribution of lar premium, individual, health insur-
government's revenues in the pan- shareholding over a much wider base. ance plan.
demic-struck year. The government is determined to com- The plan provides fixed benefit health
plete the public issue during the cur-
These approvals are being sought even insurance cover against certain speci-
rent fiscal and, with that in mind, is
before the embedded value of the in- working toward ensuring that the fied health risks. It provides timely sup-
surer is derived, and the size of the IPO port in case of medical emergencies
corporation's books are IPO-ready as
is decided, so that the IPO timeline is of end-September. and helps the insured and his family to
shortened. The government is planning remain financially independent in diffi-
to launch the IPO in the last quarter The ministry is putting the remaining cult times, LIC said in a release.
of the current fiscal year. legislative changes in place. LIC, too,
is working overtime to put in place The plan has been launched on Mon-
policies to comply with Sebi regula- day at LIC Zonal Office unit, Bengaluru
LIC gets IPO-ready by tions for listed companies. by Zonal Manager (South Central
cleaning books Although LIC has a large corporate Zone) M. Jagannath through video
The Life Insurance Corporation of India debt portfolio, the share of exposure conference, in which Regional Man-
(LIC) is cleaning up its books ahead of to corporate debt is small considering ager (Marketing) AP-Telangana
its initial public offering (IPO) later this that it has policyholder funds, which S.Sainath and Regional Manager (Mar-
year. The corporation, which brought have gone up to Rs 34,87,654 crore. keting) Karnataka Uday Kumar Navani
down its net non-performing assets to IDBI Capital Markets has put on the were among those who participated.
0.05% as of March 2021 from 0.79% block LIC's exposure to 15 companies, The release said an individual can in-
as of March 2020, is now selling its fully including DHFL, Reliance Communica- sure himself/herself (as principal in-
provided NPAs. tions, Reliance Capital, Jaiprakash Asso- sured), the spouse, children and par-
As part of its IPO plans, the corpora- ciates, Amtek Auto, IL&FS and Sintex. ents under one policy. T

Insurers likely to spike up premiums

The health insurance segment, which witnessed a 30.9 per cent jump in the June quarter, and term cover plans of life
insurers are likely to witness a spike in premium in the next couple of months in the wake of huge claims and losses, amid
the Covid pandemic. This year, life insurance Covid claims have seen a jump of 4-5 times when compared to the last year.
"As a result, insurance companies have experienced losses, with even big ones that were making profits for 10 years in
a row. Health claims have also shot up with the Covid second wave hitting insurers hard," said an insurance source.
"With the third Covid wave expected any time, prices will be rising again for sure. There is no way insurance compa-
nies will be able to sustain at current prices as the provisions made were getting exhausted in the second wave itself.
The rise will be different for various companies and segments," he said. "I have burnt fingers in the Covid health
claims," said an official of a PSU general insurer.

The Insurance Times, August 2021 11