IPO-bound Life Insurance Corporation Of India (LIC) is planning to strengthen its bancassurance channel and is eyeing 8-10% of its complete premium from the identical within the subsequent 5 years.
“Of our total premium, now only around 3% comes form bancassurance channel. Our objective is to take it to at least 8-10% in the next five years. Our focus will be more on bancassurance,” an organization supply instructed FE.
“Our agency channel will continue to be strong,” the individual mentioned, including yearly LIC grows its company channel by round 10%.
The state-owned insurance coverage behemoth, in its Red Herring Prospectus, mentioned for the 9 months interval ended December 31, 2021, bancassurance companions procured Rs 916.99 crore of its new enterprise premium (NBP) for its particular person merchandise in India, which was 2.56% of the corporate’s new enterprise premium for particular person merchandise and Rs 1,489.66 crore of its new enterprise premium for group merchandise. This was 1.65% of the corporate’s NBP for group merchandise within the nation.
As on December 31, 2021, the corporate had 70 bancassurance companions within the nation.
In India, LIC has the most important agent community of 1.33 million particular person brokers as on December 31, 2021, which accounted for 55% of the full agent community within the nation and was 6.8 occasions the variety of brokers of the second-largest life insurer.
For the general Indian market, the share of latest enterprise generated for particular person life insurance coverage via bancassurance channels elevated from 24% in fiscal 2016 to 29% in fiscal 2021. Private gamers have comparatively larger dependence on bancassurance for brand spanking new enterprise, with their share rising from 52% in fiscal 2016 to 55% in fiscal 2021.
“While the agency channel will remain the bedrock of distribution for most life insurers, with accelerated digital adoption and technological advancements, life insurers in the next few years will focus on improving productivity and efficiency by focusing on using an omni-channel strategy and leveraging both digital and physical sales methods,” LIC mentioned in its Red Herring Prospectus.
Talking to reporters throughout an IPO press convention right here, LIC managing director Siddhartha Mohanty mentioned the federal government didn’t go for a contemporary difficulty of shares for LIC however as an alternative opted for dilution of its stake because the company is cash-rich with wholesome solvency.
The proposed IPO has acquired pursuits from “multiple” anchor traders — each overseas and home. The authorities plans to dilute 3.5% of its stake in LIC to lift between Rs 20,000 crore and Rs 21,000 crore.
LIC has mounted the worth band at Rs 902-949 per fairness share for the difficulty. The share sale is thru an offer-for-sale (OFS) of as much as 221.3 million fairness shares and can open on May 4 and shut on May 9.
Source: www.financialexpress.com”