Page 14 - Insurance Times August 2021

Private Life Insurance

News

Digit Insurance achieves Motor insurance is the largest business put up in the deal goes through, going
segment, accounting for around 75% by data on the BSE website, Standard
valuation of $3 bn
of the company's premium income. Life would be left with 5.4% in the
Canadian billionaire Prem Watsa- Digit's digital platform allows the private life insurance major - down
backed Digit Insurance has achieved a company to ramp up its business from 8.9% at the end of March 2021.
valuation of $3.5 billion with its latest without a corresponding increase in If there is strong demand for HDFC Life
fundraising round of $200 million from operating costs. This also enables it to shares, the seller may sell more than
existing investor Faering Capital and
some new ones like Sequoia Capital do significantly higher business in the 7 crore currently put up in the
India and IIFL Alternate Asset smaller towns, where insurance deal, the term sheet indicated.
distribution infrastructure is not
Managers. The investment is subject to In the last three and half years since
regulatory approvals. developed. In the first two months of November 2017 when the life insurer
the current fiscal, Digit managed to
With this round of funding, the total went public, Standard Life has reduced
capital infusion into Digit has crossed grow premium by 70%, which is more its stake in the company by a little
Rs 3,000 crore - the highest for any than four times the 17% growth over 20%. At the end of December
non-life company in India. The recorded by the industry. 2017, the UKbased financial services
fundraising follows a 44% growth in major had a stake of nearly 29.4% in
premium to Rs 3,243 crore. Insurance Standard Life to sell 3.5% the company.
companies need to set aside capital for in HDFC Life
solvency in proportion to the business Drop in out-of-pocket
they write. Standard Life of UK, the joint venture
partner of mortgage financing major expenses for policyholders
The company counts Virat Kohli among HDFC in HDFC Life Insurance, is aiming Insured people are seeing a drop in
investors. The latest fundraise will
to mop up about Rs 5,200 crore by selling out-of-pocket expenses for Covid
result in a 5% dilution in the company's a 3.5% stake in the insurer through block
equity. treatment in recent months, but they
deals. Standard Life has mandated JP still have to shell out about 30 per cent
Digit Insurance chairman & founder Morgan India and BofA Securities to sell of the claim amount.
Kamesh Goyal said that 99% of the
7 crore HDFC Life shares at price
company's business by volume and between Rs 658 and Rs 678 each, the Data with the Insurance Regulatory
85% by value is generated digitally. term sheet for the deal showed. and Development Authority of India
The company's digital platform equips (IRDAI) reveal that, on an average,
it to be competitive on pricing and its At the lower end of the price band, about 71.4 per cent of the claim
use of analytics has enabled it to the offer is at a 5.5% discount to HDFC amount for Covid-19 treatment is
achieve the highest retention ratio for Life's closing price of Rs 696 on the BSE, settled by insurers, while the remaining
the entire industry in motor insurance while at the upper end the discount is 29 per cent has to be paid out of
at the time of renewal. 2.6%. If the whole of the 3.46% stake pocket by the policyholder.

14 The Insurance Times, August 2021