Page 10 - Insurance Times March 2022

LIC of India

News

Govt files LIC DRHP, may branches with 11.48 lakh agents across has a nearly two-thirds market share,
the country. fares well in agent productivity and in
mop up Rs. 1-lakh cr
LIC has over 29 crore policyholders, hav- cost-to-premium ratio.
LIC filed its draft red herring prospec- ing a separate quote for them if the According to the draft prospectus filed
tus (DRHP) with SEBI.The issue is com- policy is linked to their PAN Card. by the insurer , LIC has the highest com-
pletely an offer for sale of 31,62,49,885
equity shares by the promoter, which "The DRHP of LIC IPO has been filed mission-to-premium ratio of 5.5%
holds a 100 per cent stake in the insur- with the SEBI," Department of Invest- against the median of 4.4% for the top
ance behemoth. The President of India, ment and Public Asset Management five private players. The lowest com-
acting through the Ministry of Finance, (DIPAM) Secretary Tuhin Kanta Pandey mission ratio is for SBI Life (3.5%). The
higher commission is because LIC pri-
Government of India, is the promoter. tweeted.
marily relies on its agency force to dis-
The government of India is selling a 5 Kotak Mahindra Capital Company, Axis tribute policies, whereas many private
per cent stake in the IPO. Capital, BofA Securities India, JM Finan- companies have a large part of their
cial, Goldman Sachs (India) Securities,
50 per cent of the net issue is reserved ICICI Securities, Citigroup Global Markets distribution through banks.
for qualified institutional buyers (QIBs), India, JP Morgan India, Nomura Finan- In bancassurance, or bank-led distribu-
whereas non-institutional buyers will cial Advisory and Securities (India) and tion, a big chunk of the distribution costs
have 15 per cent of shares allocated for SBI Capital Markets are the book run- is bunched with operating expenses. LIC
them. fares relatively better here with an op-
ning lead managers for the company.
The retail portion has been fixed at 35 KFin Technologies has been appointed erating expense-to-premium ratio of
per cent of the offer. The issue is likely as the registrar for the issue. Shares of 8.7% as compared to a median of
to have reservations for eligible employ- 11.9%.
the company will be listed on both the
ees and policyholders of the company,
NSE and BSE.
according to the DRHP. Insurer gets time till Jan '23
LIC has a 66 per cent market share in
One third of the anchor portion will be New Business Premiums with 28.3 crore to dispose of 'other invest-
reserved for the domestic mutual funds, policies and 13.5 lakhs agents as of 31st
it added. ments'
March 2021. Life Insurance Corporation (LIC) has re-
Actuarial firm Milliman Advisors LLP In- The embedded value of LIC as of 30th ceived the insurance regulator's nod for
dia had worked out the embedded September 2021 is Rs 5,39,686 crore
value of LIC, while Deloitte and SBI Caps (about INR 5.4 trillion). time till January-end 2023 to dispose of
are appointed as pre-IPO transaction investments in pension, group and life
annuity funds, which do not fall in the
advisors. LIC has assets worth Rs 44 tril-
lion as of the Financial Year 2020-21. LIC fares well in cost to pre- "approved investment" category.
LIC has 8 zonal offices, which operate mium ratio Had the Insurance Regulatory and De-
velopment Authority (Irdai) denied
113 divisional offices and 2,048 Life Insurance Corporation (LIC), which
more time to transfer the investments
10 The Insurance Times, March 2022