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EXCLUSIVE
ANCHOR BOOK IN RS 21K CR LIC IPO GETS FULLY SUBSCRIBED
LIC’s IPO is the first divestment offer to have an anchor book. Through an
anchor allocation, some select, marquee investors of global and domestic repute
are allotted about 35% of the total offer a day ahead of the opening of the
issue. Till now, the government was not willing to give preferential treatment
to a handful of investors ahead of the opening the IPO to all types of
investors.
* TNN
* May 03, 2022, 07:54 IST
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Mumbai: The anchor allocation part of the Rs 21,000-crore maiden offer for life
insurance major LIC was fully subscribed on Monday evening. The total demand for
shares for large institutional investors in the anchor book — worth about Rs
5,600 crore — was much bigger than those on offer, sources said. Till the time
of going to the press, the details of the allotment were not uploaded on the
bourses.
LIC’s IPO is the first divestment offer to have an anchor book. Through an
anchor allocation, some select, marquee investors of global and domestic repute
are allotted about 35% of the total offer a day ahead of the opening of the
issue. Till now, the government was not willing to give preferential treatment
to a handful of investors ahead of the opening the IPO to all types of
investors.
Through this IPO, the government is selling 22.1 crore shares of the life
insurance major at a price band of Rs 902-949 per share, aiming to raise about
Rs 21,000 crore. This will be the largest IPO in the history of the Indian
capital market, ahead of the Rs 18,300-crore Paytm offer that closed last
November.
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The issue would open on May 4 and close on May 9. Retail investors will get a Rs
45-per-share discount on the offer price, while LIC’s policyholders will get a
discount of Rs 60.
Of the about 22.1 crore LIC shares being sold by the government through the IPO,
nearly 10 crore are reserved for institutional investors, about 3 crore for
non-institutional buyers (high net worth investors) and around 2.2 crore
reserved for its policyholders.
The life insurance major is expected to be listed on the bourses on May 17.
Earlier in February this year, finance ministry officials had told TOI that the
government was looking at a valuation of Rs 13-14 lakh crore. However, after the
start of the Russia-Ukraine war and the subsequent fall in the market, the
Centre drastically reduced the valuation of the company by less than half the
earlier level. At the current IPO size, LIC’s valuation is pegged at about Rs 6
lakh crore.
LIC’s embedded value, the most accepted valuation metric for insurance
companies, was pegged at about Rs 5.4 lakh crore as of September 30. The
valuation was done by international actuarial firm Milliman Advisors. While all
the listed Indian private life insurance players are commanding a valuation of
2.5 times to 3.5 times their embedded value, at the IPO price, LIC’s is 1.1
times. According to some analysts, this makes the IPO price attractive.
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EXCLUSIVE
ATTRACTIVE VALUATION, KEY RISKS, COMPETITORS: HOW ANALYSTS VIEW LIC IPO
The mega IPO of LIC is set to open today, which is likely to attract a lot many
retail investors. Analysts believe that it shall be interesting to witness the
debut of the company amid ongoing cautious market conditions.
* Ishwari Chavan
* ETBFSI
Click Here to Read This Story
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The mother of all initial public offerings - LIC of India - will hit Dalal
Street today.
The IPO is priced in the range of Rs 902-949, making it one of the most
expensive Dalal Street issues in recent times. Policyholders will get a discount
of Rs 60, while employees and retail investors would get a Rs 45 discount.
At the upper price band, total issue size stands at Rs 21,008.5 crore. The issue
consists of only
offer for sale (OFS) wherein the government will divest up to 22.14 crore equity
shares, constituting nearly 3.5% of its holding - valuing the insurance behemoth
at around Rs 6 lakh crore.
“With the current market sentiment, it is possible that there may not be
immediate listing gains. However, the tag of 'market leader' in the insurance
sector coupled with the ever-increasing need for insurance coverage to the
masses can assuage investors that the future,” said Siddharth Mody, Partner,
Desai & Diwanji.
Although the company will not receive any proceeds from this offer, yet the
prime purpose of the issue is to achieve the benefits of listing shares on stock
exchanges.
“The LIC IPO has gained momentum after drawing interest from potential anchor
investors. With the grey market premium witnessing an upside move, expectations
for early listing gains have resumed to circle the market,” said Shivam Bajaj,
Founder & CEO at Avener Capital
Valuation
For prospective investors of LIC, valuations look quite reasonable when compared
with listed private peers, according to analysts.
“Even though headwinds like declining market share, lower short-term persistency
ratios and sub-par margins demand a discount to private players, the current
valuation is attractive considering its strong market presence, improvement in
profitability due to changes in surplus distribution norms and strong sector
growth outlook,” a report by Geojit Financial Services said.
At the upper price band of Rs 949, LIC is available at P/EVPS (Embedded Value
Per Share) of 1.1 times, which is at a discount of 65% compared to the average
valuation of private life insurance players - HDFC Life Insurance's 4.05 times,
SBI Life Insurance 's 3.10 times, and ICICI Prudential Life's 2.5 times.
Will it take on already-listed private players?
Analysts believe that since the issue has come in at attractive valuations, as
and when stock enters key indices, there could be a tactical move to buy more of
LIC at expense of other insurance stocks.
“It is yet to be seen how government-backed LIC will take on already listed
private players such as HDFC Life Insurance and ICICI Prudential Life with
regard to market share in the insurance sector and investor confidence. We may
see a shift from institutional and retail investors pulling out from private
insurance companies to get a piece of the biggest IPO till date," said Mody.
Key risk and concerns
Adverse variation in persistency metrics could have a material adverse effect on
financial condition, a report by ICICI Securities said.
It added two more risks – interest rate fluctuations and volatility in capital
markets may adversely affect profitability and estimates used in the embedded
value reports could vary materially if key assumptions are changed.
Additionally, the Geojit report adds that LIC is facing high competition from
private insurance players, especially in the urban areas
LIC still remains dominant
According to data by Geojit Research, LIC had an 81.1% and 88.8% market share of
group policies issued in India in FY21 and the nine months ended December 31,
2021.
LIC’s expense ratio is considerably lower than that of private players on
account of it being a mature business, as per ICICI Securities.
Owing to high expense and commission cost in relation to business, the total
cost ratio of private players has remained high compared to LIC.
Furthermore, LIC continues to have the largest network of 13.3 lakh individual
agents as at December 31, 2021, which accounted for 55% of total agent network
in the country.
Industry Outlook
Based on life insurance premium, India is the tenth largest life insurance
market in the world and the fifth largest in Asia, as per Swiss Re's report for
July 2021.
The industry’s total premium has grown at 11% CAGR in the last five years ending
in FY21. CRISIL Research forecasts the total premium for life insurers to grow
at 14-15% CAGR over the next five years.
At this level of premium, life insurance as a proportion of GDP is projected to
reach 3.8% by FY26, up from 3.2% in FY21.
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EXCLUSIVE
CONGRESS TARGETS GOVT AHEAD OF MEGA LIC IPO, SAYS SHARES UNDERVALUED
Randeep Surjewala claimed that the LIC has 30 crore policyholders and its total
assets are to the tune of Rs 39,60,000 crores (USD 526 Billion) as of September
2021 and a stock portfolio of Rs 52,000 crore.
* PTI
Click Here to Read This Story
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Ahead of the mega LIC IPO, the Congress Tuesday questioned the pricing of
shares, alleging they are undervalued and being offered at throwaway prices at
the cost of the trust of 30 crore policyholders.
Congress general secretary and chief spokesperson Randeep Surjewala asked why
did the government reduce LIC valuation from Rs 12-14 lakh crore in February to
Rs 6 lakh crore in just two months.
He said the government had in February this year targeted to get Rs 70,000 crore
by selling five percent stake in the public sector undertaking, but it has now
been reduced to Rs 21,000 crore and 3.5 percent stake sale.
"Why is the government trying to sell LIC when domestic and global financial
markets are in turmoil on account of the Russia-Ukraine war and a host of
factors leading to economic downturn," he asked.
"The Secretary in charge of public sector divestment has said that the
government will not sell its stake in PSUs if market conditions are not
favourable. Why is LIC's IPO an exception to this policy? India seeks answers,"
he said.
Surjewala said that while filing the prospectus in February 2022 for this mega
IPO, the LIC disinvestment was aimed at 2.5 times the embedded value (EV), but
now the valuation of the IPO is about 1.1 times the embedded value.
Comparably, HDFC Life Insurance is trading at 3.9 times EV, and SBI Life & ICICI
Prudential Life trade at 3.2 times and 2.5 times their embedded value
respectively, he said.
He also claimed that since January-February 2022, the share price band of LIC
has been paired down by the Modi government from Rs 1100 per share to the
current price band of Rs 902 - 949 per share and some experts feel that the
state exchequer will lose Rs 30,000 crore by this reduction in embedded value
and the pairing down the price band.
"Why did the Modi Government suddenly reduce the valuation of LIC and the issue
size after roadshows in India and abroad," he asked, claiming that in February
2022, the government conducted formal roadshows for big ticket investors,
Pension Funds, Mutual Funds, Investment Corporations with a target to get Rs
70,000 crore by selling of five percent stake.
He sought answers from the government for the reason for a “change of heart”
after roadshows abroad to revise the valuation and also reduce the stake sale
from five per cent to 3.5% "which remains unexplained".
The reason for the government undermining these key determinants is unknown to
every market watcher or financial expert, he said.
The Congress leader claimed that the LIC has 30 crore policyholders and its
total assets are to the tune of Rs 39,60,000 crores (USD 526 Billion) as of
September 2021 and a stock portfolio of Rs 52,000 crore.
The company has income from its investments to the tune Rs 3.35 lakh crore in
the April-September 2021 period and directly employs 13.94 lakh families (12.80
Lakh agents plus 1.14 lakh employees) through its 3,542 offices across the
country.
He said the company issues three crore policies per year, which amounts to about
one lakh policies per day and is declared as the world's 10th largest insurance
brand.
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EXCLUSIVE
LIC REACHES ITS POLICYHOLDERS VIA SMS ON IPO EVE
Ahead of its initial public offering (IPO), insurance behemoth LIC on Tuesday
approached its policyholders through SMS and other medium to inform them about
the share sale. The IPO of LIC opens for retail and institutional investors on
Wednesday and will close on May 9.
* PTI
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Ahead of its initial public offering (IPO), insurance behemoth LIC on Tuesday
approached its policyholders through SMS and other medium to inform them about
the share sale.
The IPO of LIC opens for retail and institutional investors on Wednesday and
will close on May 9.
LIC has fixed the price band at Rs 902-949 per equity share for the issue. The
offer includes a reservation for eligible employees and policyholders.
The retail investors and eligible employees will also get a discount of Rs 45
per equity share and policyholders will get a discount of Rs 60 per share.
The share sale is through an Offer-For-Sale (OFS) of up to 22.13 crore equity
shares. The shares are likely to be listed on May 17.
"LIC filed red herring prospectus(RHP) dt 26.4.22 with SEBI/Stock Exchanges for
its IPO reserving shares for eligible policyholders. For details & risks in
investing in LIC IPO and disclaimers, see RHP and links....," said the SMS sent
by the insurer to the policyholders on their registered mobile numbers.
LIC has been informing about the IPO for several months through various channels
including print and TV advertisements.
Earlier in the day, LIC informed it has garnered a little over Rs 5,627 crore
from anchor investors led primarily by domestic institutions.
Anchor Investors' (AIs) portion (5,92,96,853 equity shares) was subscribed at Rs
949 per equity share, the insurer said in an early morning filing to stock
exchanges.
The country's largest insurer reduced its IPO size to 3.5 per cent from 5 per
cent decided earlier due to the prevailing market condition.
Even after the reduced size of about Rs 20,557 crore, LIC IPO is going to be the
biggest ever in the country.
So far, the amount mobilised from the IPO of Paytm in 2021 was the largest ever
at Rs 18,300 crore, followed by Coal India (2010) at nearly Rs 15,500 crore and
Reliance Power (2008) at Rs 11,700 crore.
LIC was formed by merging and nationalising 245 private life insurance companies
on September 1, 1956, with an initial capital of Rs 5 crore.
Its product portfolio comprises 32 individual products (16 participating
products and 16 non-participating products) and seven individual optional rider
benefits. The insurer's group product portfolio comprises 11 group products.
As on December 2021, LIC had a market share of 61.6 per cent in terms of gross
written premium, 61.4 per cent in terms of new business premium, 71.8 per cent
in terms of the number of individual policies issued, and 88.8 per cent in terms
of the number of group policies issued.
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EXCLUSIVE
71% OF ANCHOR ALLOTMENT FOR LIC IPO MADE TO 15 MUTUAL FUNDS: WHAT THIS MEANS FOR
RETAIL INVESTORS AND POLICYHOLDERS
Anchor investors subscribed to a total of 5,92,96,853 equity shares at Rs 949/-
per equity share.
* Sunainaa Chadha
* TIMESOFINDIA.COM
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NEW DELHI: Ahead of its mega opening on Wednesday, Life Insurance Corporation
has raised around Rs 5,620 crore from anchor investors, the maxible allowable
limit.
Anchor investors subscribed to a total of 5,92,96,853 equity shares at Rs 949/-
per equity share.
Anchor investors are institutional investors that are allotted shares before the
subscription opens for retail and other investors, and have to commit to holding
their shares for a certain period after listing.
Out of the total allocation, 71.12% were allocated to 15 domestic mutual funds
through 99 schemes. The anchor investors include mutual funds like ICICI
Prudential, SBI Equity Hybrid Fund, SBI Blue chip fund, HDFC Hybrid equity fund,
Aditya Birla Sun Life, Axis Mutual Fund, HCL Corporation, SBI Flexi cap fund,
Nippon Life, Kotak Mahindra Life Insurance, Franklin India Flexi cap etc.
SBI Mutual Fund subscribed to shares worth over Rs 1,000 crore, ICICI Prudential
MF subscribed to shares worth over Rs 700 crore, HDFC MF subscribed to shares
worth over Rs 650 crore. Among foreign funds, Singapore's sovereign wealth fund
(GIC) subscribed to shares worth over Rs 400 crore while BNP Investments
subscribed to shares worth nearly Rs 450 crore.
In order to improve price discovery during the initial public offering process,
market regulator Sebi introduced anchor investors in the Indian IPO market in
the year 2009. This process was aimed at improving investment opportunity for
retail investors and to boost the credibility of the issuing firm in the new
issue market, so that all participants in the market can gain confidence.
"Anchor investment reduces underpricing i.e. one of the largest costs faced by
the firm going public is the implicit cost of underpricing. This indicates that
anchor-backed IPOs exhibit better pricing efficiency than non-anchor backed
IPOs. Additionally, it can be interpreted that anchor participation reduces the
cost of the firm going public and provides sufficient indication to the
investors regarding fair valuation of the issue. We also find that anchor
investment elicits more response from potential investors. Anchor-backed IPOs
are subscribed to at a better rate than non-anchor backed IPOs. Both qualified
institutional investors and retail individual investors subscribe more to
anchor-invested IPOs than non-anchor invested issues. These results indicate
that investors in general and retail investors in particular believe that anchor
investment provides credible certification about quality of the issue," said
Seshadev Sahoo, Professor of the Finance and Accounting area at Indian Institute
of Management Lucknow.
Market regulator Sebi recently said the existing lock-in of 30 days will
continue for 50% of the portion allocated to anchor investors and for the
remaining portion, a lock-in of 90 days from the date of allotment will be
applicable for all issues opening on or after April 1. The change in the anchor
lock-in rules is to avoid sell-off by anchor investors.
The IPO has reserved 2.96 crore shares for non-institutional buyers: up to 15.8
lakh shares for employees and 2.2 crores for policyholders. While retail
investors and LIC employees will get a discount of Rs 45 per share, LIC policy
holders will get a discount of Rs 60 a share. LIC is likely to be listed on the
bourses on May 17.
The government is expecting retail investors and even LIC policy holders to make
a beeline for the issue. LIC estimates up to 70 lakh retail applications, which
is more than five times the average retail applications received for the Indian
primary equity market issuances in the last financial year. In fact half of the
retail subscriptions are expected to come from the country’s western region,
including Maharashtra, Gujarat and Rajasthan, reported Economic Times.
"The Government is only diluting 3.5% and will continue to hold 96.5% of the
company. The free float will be less and may create scarcity among institutions
that wants to build positions in the company. This may create artificial demand
in the short term, till the Government dilutes further stake in the company. The
IPO price band is set at Rs 902 to Rs 949 per equity share. The policyholders
will get a discount of Rs 60 per share, while retail shareholders & employees
will get a discount of Rs 45 per share. This probably means the shares on offer
will be absorbed comfortably by retail and institutional investors," said Anoop
Vijaykumar, smallcase manager & Fund Manager and Head of Research, Capitalmind.
Why is the LIC IPO so important?
"As they provide special discounts to the LIC employees as well as unitholders,
it will potentially tap into a very large section of the market that so far
might not have invested in IPOs. The LIC IPO brings transparency to its
consumers, as it will be accountable to the government as well as the former,
investors, and exchanges. While this improves the quality of corporate
governance of the firm, it also shall help raise a substantial amount of money
for the government," said Kanika Agarrwal, Co-founder and Chief Investment
Officer, Upside AI.
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EXCLUSIVE
SMALL-TOWN RETAIL INVESTORS TO PROP UP DEMAND FOR LIC IPO
Small-town retail investors with an emotional attachment to India’s oldest
insurer and its long-loyal policyholders will likely prop up demand for the
country’s largest-ever initial public offering, even as jittery markets forced
the deal size to be slashed by more than half.
* Bloomberg
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NEW DELHI: Small-town retail investors with an emotional attachment to India’s
oldest insurer and its long-loyal policyholders will likely prop up demand for
the country’s largest-ever initial public offering, even as jittery markets
forced the deal size to be slashed by more than half.
State-run Life Insurance Corporation of India is taking orders from retail
investors between May 4 through May 9 in a listing that could, at the new
reduced price range, raise up to $2.7 billion. Russia’s invasion of Ukraine and
rising US interest rates are putting foreign funds off emerging market stocks,
but investment advisers say the mammoth insurer’s float will likely be lapped up
by mom-and-pop investors.
“There are IPOs and then there is the LIC share sale. Both are entirely
different things,” said Pallav Bagaria, a director at the Pune-headquartered
Sapient Wealth Advisors & Brokers Ltd. “The insurer has had an association with
an entire generation of people, and they want to buy LIC because they feel it’s
their company.”
Founded in the late 1950s, LIC was the country’s only insurer until the
government opened up the market to private competition in 2000. It remains
India’s largest insurer with a sales agent in almost every neighborhood in even
the smallest towns.
Many people who grew up in the 1960s have an “emotional engagement” with LIC,
which they view as synonymous with insurance, said Vikaas Sachdeva, chief
executive officer at Emkay Investment Managers Ltd.
“There is a fair amount of buzz around the issue of shares given it is a
phenomenal brand that has been around for years,” said Sachdeva, who said he has
been receiving a barrage of phone calls from his father’s friends and relatives
asking about the IPO.
He said the government’s decision to scale back the float by making shares
cheaper and the deal size smaller has only made it “more compelling.”
India’s government is selling 221.4 million LIC shares at between 902 rupees and
949 rupees each, which would raise as much as Rs 21,000 crore at the top end of
the range --- far below the Rs 60,000 crore target earlier.
Retail investors will be alloted 35% of the total shares in the offer, and given
a discount of 45 rupees from the IPO price; 10% of the float, meanwhile, has
been earmarked for LIC’s policyholders, who will receive a 60-rupee discount on
each share. The minimum bid lot size is 15 shares, which means a retail investor
would have to shell out at least 13,560 rupees ($177) for a stake. Policy
holders have to spend at least 13,335 rupees.
“This investment is like insurance. We are sure that we are not going to get
trapped in a wrong company or some fly-by-night operator,” said 74-year old Ravi
Gogia, a former employee of Tata Steel Ltd., who plans to bid for LIC’s shares
in the IPO.
Growth headwinds
Still, not everyone is a fan, with some investors wary of buying into a
slow-growing insurer at a time when India’s IPO market is struggling.
“I think LIC is too huge of a company to post strong year-on-year revenue growth
from here on,” said Aditya Chawan, a 34-year-old consultant with a global
technology firm in India, who has been an investor in stocks for five years.
LIC has a 60% market share of India’s 24-company-strong life insurance market,
but its hold is shrinking as private players like HDFC Life Insurance Co. Ltd.
and SBI Life Insurance Co. Ltd. expand. The private sector has been on an
aggressive expansion spree during the pandemic, growing new individual policy
premiums while LIC struggles.
“The long-term story of these private life insurers -- that they are sustainably
gaining market share from LIC -- remains unchanged,” Emkay Global Financial
Services Ltd. analyst Avinash Singh said.
It doesn’t help, said some investors, that LIC hasn’t declared a clear dividend
policy, nor that the IPO market is struggling. The S&P BSE IPO Index, a gauge of
newly listed shares, has fallen 15% this year after nearly tripling in the
previous three. Mobile payments company Paytm -- India’s biggest IPO until LIC’s
-- is the index’s worst performer, down 70% since its highly anticipated float
in November.
In the meantime, LIC and the country’s large brokers continue to build up
momentum for the share sale. LIC has been advertising the float in newspapers
since the start of the year, and is also offering its 286 million policyholders
with easy access to brokerage accounts to buy into the float.
Axis Securities Ltd. has opened around 45,000 accounts for LIC’s prospective IPO
investors in the past month, while ICICI Securities Ltd. is luring potential new
investors to the float with offers like free brokerage accounts as well as
access to its online training courses for trading. ICICI Securities chief
executive Vijay Chandok said the brokerage has fine-tuned its IPO application
process and made it more user-friendly, with first-time subscribers in mind.
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EXCLUSIVE
AGEAS FEDERAL LIFE INSURANCE CLOCKS RS 94 CR NET PROFIT FOR FY22
New Delhi, May 2 (PTI) Private sector insurer Ageas Federal Life Insurance
(AFLI) on Monday said it has posted a net profit of Rs 94 crore for the fiscal
year ended March 2022.
* PTI
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New Delhi, May 2 (PTI) Private sector insurer Ageas Federal Life Insurance
(AFLI) on Monday said it has posted a net profit of Rs 94 crore for the fiscal
year ended March 2022. This is the 10th consecutive year of profit for the
company since it first declared profit in FY2012-13, Ageas Federal Life said in
a statement.
The insurer said its total premium in 2021-22 rose by 13 per cent to Rs 2,207
crore as against Rs 1,959 crore a year ago, despite facing various challenges
due to the pandemic.
"The growth was driven by a 27 per cent rise in Individual New Business Premium
to Rs 639 crore and 5 per cent rise in renewal premium to Rs 1,391 crore. The
company also benefitted from a strong growth of 23 per cent in Individual New
Business Premium from Federal Bank," it said.
The life insurer improved its value of new business (VNB) margin by 9 per cent
to 22.39 per cent on the back of better understanding of customers' needs during
the pandemic, it added.
The insurer said due to surge in claims due to COVID-19, its focus was on
further digitising the claims process.
Its turn around time (TAT) from date of intimation of claim to date of
settlement for individual death claims (including COVID-19 claims) was 16 days.
The TAT in resolving complaints during the year was 2 days -- among the best in
the life insurance industry and considerably lower than the industry average of
5 days, it said.
The claim settlement ratio for individual death claims in 2021-22 was 97.03 per
cent despite the challenges faced on account of the pandemic.
"Despite the uncertain COVID situation during the first few months of the year,
we recovered strongly to declare profit for the tenth consecutive year. On the
distribution front, bancassurance continued to contribute in a big way to our
growth numbers during the year.
"We also focused on growing our proprietary channels - agency, group, online,
and DST (direct sales team) in a smart, calibrated manner," said Vighnesh
Shahane, MD and CEO, Ageas Federal Life Insurance.
He said the company also witnessed an increased demand for term plans as
awareness has grown over the last couple of years. Also, with the falling
interest rate regime and the uncertain global economic scenario, customers are
showing greater interest in guaranteed plans.
"Interestingly because the stock markets have been buoyant over the last 18
months, we have also seen a lot of new in-flows and renewals of ULIP plans...
"We aimed to leverage the power of automation including next-generation digital
technologies like Artificial Intelligence (AI), Machine Learning, and Data
Analytics to transform our interactions with customers, employees, distribution
partners, vendors and other stakeholders," Shahane said further.
He also informed that Ageas, the foreign partner of the life insurance company,
will increase its stake in the JV to the maximum permissible limit of 74 per
cent and it is being reviewed by regulator Irdai.
Ageas Federal Life Insurance will become the first company in the insurance
sector where the foreign partner will raise its stake to the maximum limit of 74
per cent, Shahane added.
The insurer was originally a tripartite JV between Federal Bank, IDBI Bank and
Ageas.
Ageas increased its stake in AFLI from 26 per cent to 49 per cent after buying
23 per cent stake from IDBI Bank in December 2020. Federal Bank holds 26 per
cent in AFLI.
Shahane said the insurer is actively looking to rope in another partner, which
may be another bank as well as it helps scale the insurance business.
AFLI began operations in 2008 and reported its first profit in the fifth year
itself. PTI KPM KPM ABM ABM
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EXCLUSIVE
INSURANCE CLAIMS CAN'T BE REPUDIATED BY RELYING ON DEFINITIONS OF TERRORISM IN
PENAL LAWS: SC
The repudiation was upheld by the National Consumer Disputes Redressal
Commission (NCDRC) which referred to the definitions of the term 'terrorism'
provided under various penal laws.
* PTI
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NEW DELHI: In a significant verdict, the Supreme Court on Monday held that the
parties, including insurance firms, cannot rely on definitions of terrorism in
various penal laws to repudiate insurance claims which have to be governed by
the definition of the term given in the policy.
The verdict came on a plea of Narsingh Ispat Ltd, a Jharkhand-based firm, the
insurance claims of which under the Standard Fire and Special Perils Policy, was
repudiated by the Oriental Insurance Company Ltd by taking recourse of the
'exclusion clause' in the policy regarding loss or damage caused by acts of
terrorism.
The repudiation was upheld by the National Consumer Disputes Redressal
Commission (NCDRC) which referred to the definitions of the term 'terrorism'
provided under various penal laws.
A bench comprising Justices Ajay Rastogi and Abhay S Oka set aside the verdict
of the apex consumer body, NCDRC, and restored the complaint of the insured firm
besides asking the insurance firm to deposit the sum of Rs 89 lakh in the
Registry of the Commission within one month from Monday.
“The same shall be deposited in the interest-bearing account on auto renewal
basis. At the same time, the appellant (insured firm) will be at liberty to file
an application for withdrawal of the amount before the Commission pending
complaint. If such an application is filed by the appellant, the Commission may
examine on its own merits and decide the same in accordance with law,” the top
court said.
The verdict, penned by Justice Oka, dealt in detail the exclusion terms on the
ground of terrorism of the policy and said the insurance company did not
discharge the "burden of bringing the case within the four corners of the
Exclusion Clause”.
“When the policy itself defines the acts of terrorism in the Exclusion Clause,
the terms of the policy being a concluded contract will govern the rights and
liabilities of the parties. Therefore, the parties cannot rely upon the
definitions of ‘terrorism' in various penal statutes since the Exclusion Clause
contains an exhaustive definition of acts of terrorism,” it held.
It also said NCDRC “committed an error” by applying the Exclusion Clause and
moreover, the policy specifically covers the damage to the insured's property
caused by violent means.
According to the case records, Narsingh Ispat Ltd had purchased the Standard
Fire and Special Perils Policy from the insurance firm for the period from June
28, 2009 to June 27, June 2010 for its plant at village Khunti in Saraikela,
Jharkhand for a sum assured of Rs 26 crore by paying a premium of over Rs 2
lakh.
According to the insured firm, the policy covered the loss caused to the
property of the appellant on account of fire, lightning, explosion, riots,
strike, among others. Later, a claim was lodged on the basis of the policy based
on the incident of March 23, 2010 in which about 5,060 anti-social armed people
entered the factory premises and demanded money and jobs for local people.
The rioting mob then caused substantial damage to the factory, machinery and
other equipment with an intention to terrorise the management and workers by
forcing them to pay a ransom to the miscreants.
The claim was denied based on the exclusion clause by the insurer and this was
upheld by the NCDRC.
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EXCLUSIVE
WILL TRAVEL INSURANCE GET A MAJOR PANDEMIC PUSH
Despite the fact that the deadly virus wrecked the travel industry which
contributes significantly to GDP, travellers are now starting to dream again of
beaches, mountains and monuments. This pent-up demand seems to be boosting
travel insurance too. Compared to the pre-pandemic era, more international
travellers seem to be buying insurance now.
* Pallavi Arun Verma
Click Here to Read This Story
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Many of us are waiting to make the most of the summer and escape the scorching
heat by scheduling a travel plan. As restrictions on country-specific travels
are lifted, there has been a rising interest in international travels.
Despite the fact that the deadly virus wrecked the travel industry which
contributes significantly to GDP, travellers are now starting to dream again of
beaches, mountains and monuments. This pent-up demand seems to be boosting
travel insurance too. Compared to the pre-pandemic era, more international
travellers seem to be buying insurance now.
Today, travel is part of academic, personal and business life, hence students,
executives and tourists are likely to buy compulsory travel insurance policies
as countries open their borders for unrestricted travel. With Covid-19 running
roughshod on global travel, it has become more important to add travel insurance
in your to-do list for a hassle-free trip.
SAFETY, HYGIENE TOP PRIORITY FOR INTER-CITY BUS TRAVELLERS: SURVEY
The results illustrate that with long due vacations, Indians are enthusiastic to
travel and yet cautious about hygiene and sanitisation. IntrCity performed a
nationwide online survey of 3,100 persons aged 18 to 60 years old who travel
between India's metros, tier-1, and tier-2 cities. It was conducted between
March 15 and April 10, 2022.
See More Details
Considering the risks associated with travelling in a foreign land, it is
crucial for a traveller to cover him/ her from potential financial losses due to
theft, loss of travel documents/ passport for a wholesome trip. Travel insurance
policy can cover for medical expenses overseas, hijack, baggage, travel delays
due to repatriations/ evacuation to India, etc.
With Covid-19 and its evolving variants, consider buying travel insurance before
you plan your next vacation. To choose the best policy, it is important to
understand different Travel insurance plans. Here are some options:
* Domestic Travel Insurance: Domestic travel insurance is an insurance offered
to customers for travel within India. It is a policy which protects the
policy holder in case of problems while travelling. It provides coverage for
medical emergencies during the course of travel, permanent disability and
death, baggage loss, travel delay and personal liability.
* International Travel Insurance: It is important to get yourself insured
before you board on a foreign trip for any purpose. A travel insurance
provides you protection against any unseen medical or non-medical emergencies
during the trip.
* Individual Travel Insurance: This is an important policy to buy when you are
travelling abroad alone. It offers various benefits along with normal
benefits like emergency medical expenses, return to home country in case of
medical emergency, any dental emergency expenses following an accident,
compensation following accidental injuries, baggage loss and other benefits.
* Annual Multi-trip Travel Insurance (Corporate Travel Insurance): Employees of
any corporate or organisation can get coverage for international travel under
annual multi-trip travel insurance.
* Student Travel Insurance: This is a policy for students who are travelling
abroad for further studies. It offers comprehensive coverage in the form of
expenses incurred on medical treatment, passport loss and other reasons
leading to study interruptions.
* Senior Citizen Travel Insurance: This insurance caters to the age group of
people between 61 and 70. It offers coverage for dental treatment and
cashless hospitalisation along with normal travel insurance coverage.
* Family Travel Insurance: This is a policy for the entire family. It offers
coverage for hospitalisation, baggage loss, and other incidental expenses.
To make your journey safe and relaxing, this should be the first step as you
plan your most awaited trip. Next time you surf the internet for the best
destination to visit, look for travel insurance policies that fit your travel
requirements
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EXCLUSIVE
IN PICTURES: A QUICK RECAP OF 5 THINGS TO KNOW BEFORE LIC'S IPO KICKS IN
The much-awaited issue of the initial public offering (IPO) of Life Insurance
Corporation (LIC) is set to open on Wednesday, May 4, and till May 9. Here's a
quick recap of the five key things you should know before investing in India's
largest issue so far. Take a glance.
* ETBFSI
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India's largest insurer, Life Insurance Corporation of India, is set to open its
IPO tomorrow for subscription, and close on May 9. The government has slashed
the size of IPO by about 60%, as geopolitical tensions weigh on investor demand.
However, despite the truncated size, the IPO will still be the largest ever in
the country till date.
The IPO will be a pure offer for sale (OFS). Ever since the LIC announced
launching the initial public offering (IPO), 6.48 crore LIC policyholders have
shown interest to get the much-touted share of the largest insurance company in
the country.
Here are the 5 key things investors should know before investing in LIC IPO :
1) LIC IPO GMP : According to market observers, LIC shares are available at a
premium (GMP) of ₹75 in the grey market today. The GMP price for the LIC’s first
public offering (IPO) is about 2.5 times the share price that LIC would issue
for ordinary investors.
2) LIC listing date : Shares of LIC are likely to list on bourses on May 17.
3) LIC IPO subscriber quota : India’s insurance behemoth LIC has reserved 10% of
its IPO shares to eligible policyholders. Qualified institutional buyers will
have access to 50% of the shares while retail investors will be able to bid for
35% shares. The remaining is reserved for non institutional buyers.
4) Price band and size of LIC IPO : LIC will sell its shares in the range of Rs
902-949 per equity. Additionally, it would offer a Rs 60 discount to
policyholders and Rs 40 to retail investors and employees. Through the initial
public offering of LIC, the government will raise about Rs 20,557 crore. The
earlier projection was Rs 60,000 crore.
5) LIC IPO lot size : A bidder can invest in a minimum of one lot which will
comprise 15 shares, and in multiples of 15 thereafter. A maximum of 14 lots can
be applied for at the upper end of the price band, as LIC has set an investment
limit of Rs 2 lakh for one investor.
If you have missed out on anything regarding LIC IPO, ETBFSI brings to you a
detailed coverage on India's largest issue.
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