Oriental Insurance Company is set to be listed in the next financial year. The final decision on exact valuations and quantum of stake sale will be taken by the end of this financial year, said A V Girija Kumar, chairman-cum-managing director (CMD). “We are certainly looking at listing the company in line with the government’s programme in 2018-19. Once we come with our results in March 2018, the government will do the necessary reviews and give their approval. Listing is a lengthy process as it takes few months for the preparation, but one can hear the good news by second-third quarter of next fiscal (year),” he said.
Oriental Insurance, which had seen its solvency ratio go below the mandatory level of 150 per cent, has improved it to 152 per cent for half year ending September 2017. Last September, its solvency ratio had stood at 114 per cent. Profit after tax also improved to Rs 705 crore in the six months ending September 2017, against a loss of Rs 382 crore last year. Senior officials in the company said recovery from the weak financial situation was largely because it exited the loss-making portfolio of health and motor insurance.
“Improvement in various financial parameters can be attributed to not growing aggressively in the segments where there are huge underwriting losses like motor and health, especially in group mediclaim. Group mediclaim is creating huge losses for public sector insurers and we have now brought that under control,” Kumar said. The loss ratio for the health segment, which was 114 per cent in September 2016, now stands at around 95 per cent. The loss ratio in the motor third-party segment fell below 100 per cent in September 2017 from 120 a year earlier.
According to the data from the Insurance Regulatory and Development Authority of India (Irdai), the gross direct premium underwritten by Oriental Insurance up to October this year was Rs 6,647.47 crore, against Rs 6,327.47 crore last year, a growth of 5.06 per cent. The market share of Oriental Insurance as of October 2017 stood at 7.72 per cent.
Going forward, the company is looking at introducing new products and even a revision in pricing. In the past few months, two government-sponsored insurance companies, New India Assurance Company and General Insurance Corporation have raised Rs 9,600 crore and Rs 11,372.6 crore, respectively in their initial public offerings. Even National Insurance has indicated they are looking to list their shares on bourses by the end of this financial year or the start of FY19.