You are here: Home » Budget » News » Financial Sector

Much preparation ahead for listing state-owned general insurers

It is anticipated that New India, which is among the largest in the public sector, could be the first to be taken to the listing path

The government is planning to list the public general companies. In his speech, finance minister said that the general companies owned by government will be listed on the stock exchanges. While the process before the actual takes place is expected to be long, sector officials expect this to bring more transparency in their operations.

At present, New India Assurance, United India Insurance, Oriental India and National Insurance, apart from the sole domestic reinsurer General Corporation of India (GIC) are the five public sector general companies. However, Jaitley did not share any timeline of the of these entities.

In his speech, Jaitley said that public shareholding in government-owned companies is a means of ensuring higher levels of transparency and accountability. To promote this objective, he said that the general companies owned by the Government will be listed in the stock exchanges.
Read our full coverage on Union 2016

Prior to this, there have been discussions in the past between finance ministry and these insurers on their possible listing. No company is currently listed on the stock market. It is anticipated that New India, which is among the largest in the public sector, could be the first to be taken to the path.

G Srinivasan, chairman and managing director of New India said that the of the companies could be done in phases and that they have not been told of any timeline. He added that the consultation process for the could begin soon since real action will be taken after that.

Much preparation ahead for listing state-owned general insurers

New India Assurance, the country's largest general insurer, had posted a 31 per cent increase in its net profit for the financial year 2014-15. The insurer had posted net profit of Rs 1,431 crore for FY15 compared to Rs 1,089 crore in FY14. The global business (premium) including Indian and abroad stood at Rs 16,050 crore showing a growth of 12.2 per cent. For FY16, they have set a target of Rs 18,000 crore global (India plus abroad) premium for FY16 and Indian premium of Rs 15,000 crore.

will not only involve overhaul of existing processes, experts point that in the run-up to the Initial Public Offer (IPO) for the on the exchanges the way of functioning of these insurers would have undergo a change. Anuraag Sunder, Director, PwC India said that the government will not only look at the market timing for but also look into whether the entities are ready. "There will be a lot of pressure on the top management of these insurers to better the systems since accountability and transparency would be the main focus," he added.

Before a actually takes place, a clean up of their books and operations would be essential, said industry officials. This would involve bringing down losses across segments like motor third party, group health, fire and engineering among others. Further, underwriting profitability also would be essential to get the desired valuation from the markets.

R M Vishakha, MD & CEO, IndiaFirst Life said that this is the first time that it would be interesting to see the impact that of the company would have on operational efficiencies and results. Underwriting losses still remain a concern in the general industry due to rising claims from segments like motor and health. This means that the premiums collected is not sufficient to meet the demands of claims.

Since they are not listed, no mandate is given to all insurers including public sector insurers to disclose all information on a periodic or quarterly basis like listed companies. Hence, once this happens, not just financial results, other smaller company decisions and activities would need to be made public. The move to initiate of public general companies is expected to bring in greater responsibility and transparency in their operations, according to M S Sreedhar, Managing Director & CEO, Royal Sundaram General Insurance.


Further, experts said that company books would be watched closely not just by the government, but also public shareholders who would then own stake in these insurers. A senior consultant added that this would mean every decision could be questioned by shareholders. making them more accountable and prevent them to indulge in extreme competitive practices including discounts in premium that could impact the balance sheet.

image
Business Standard
177 22
Business Standard

Much preparation ahead for listing state-owned general insurers

It is anticipated that New India, which is among the largest in the public sector, could be the first to be taken to the listing path

M Saraswathy  |  Mumbai 

The government is planning to list the public general companies. In his speech, finance minister said that the general companies owned by government will be listed on the stock exchanges. While the process before the actual takes place is expected to be long, sector officials expect this to bring more transparency in their operations.

At present, New India Assurance, United India Insurance, Oriental India and National Insurance, apart from the sole domestic reinsurer General Corporation of India (GIC) are the five public sector general companies. However, Jaitley did not share any timeline of the of these entities.

In his speech, Jaitley said that public shareholding in government-owned companies is a means of ensuring higher levels of transparency and accountability. To promote this objective, he said that the general companies owned by the Government will be listed in the stock exchanges.
Read our full coverage on Union 2016

Prior to this, there have been discussions in the past between finance ministry and these insurers on their possible listing. No company is currently listed on the stock market. It is anticipated that New India, which is among the largest in the public sector, could be the first to be taken to the path.

G Srinivasan, chairman and managing director of New India said that the of the companies could be done in phases and that they have not been told of any timeline. He added that the consultation process for the could begin soon since real action will be taken after that.

Much preparation ahead for listing state-owned general insurers

New India Assurance, the country's largest general insurer, had posted a 31 per cent increase in its net profit for the financial year 2014-15. The insurer had posted net profit of Rs 1,431 crore for FY15 compared to Rs 1,089 crore in FY14. The global business (premium) including Indian and abroad stood at Rs 16,050 crore showing a growth of 12.2 per cent. For FY16, they have set a target of Rs 18,000 crore global (India plus abroad) premium for FY16 and Indian premium of Rs 15,000 crore.

will not only involve overhaul of existing processes, experts point that in the run-up to the Initial Public Offer (IPO) for the on the exchanges the way of functioning of these insurers would have undergo a change. Anuraag Sunder, Director, PwC India said that the government will not only look at the market timing for but also look into whether the entities are ready. "There will be a lot of pressure on the top management of these insurers to better the systems since accountability and transparency would be the main focus," he added.

Before a actually takes place, a clean up of their books and operations would be essential, said industry officials. This would involve bringing down losses across segments like motor third party, group health, fire and engineering among others. Further, underwriting profitability also would be essential to get the desired valuation from the markets.

R M Vishakha, MD & CEO, IndiaFirst Life said that this is the first time that it would be interesting to see the impact that of the company would have on operational efficiencies and results. Underwriting losses still remain a concern in the general industry due to rising claims from segments like motor and health. This means that the premiums collected is not sufficient to meet the demands of claims.

Since they are not listed, no mandate is given to all insurers including public sector insurers to disclose all information on a periodic or quarterly basis like listed companies. Hence, once this happens, not just financial results, other smaller company decisions and activities would need to be made public. The move to initiate of public general companies is expected to bring in greater responsibility and transparency in their operations, according to M S Sreedhar, Managing Director & CEO, Royal Sundaram General Insurance.


Further, experts said that company books would be watched closely not just by the government, but also public shareholders who would then own stake in these insurers. A senior consultant added that this would mean every decision could be questioned by shareholders. making them more accountable and prevent them to indulge in extreme competitive practices including discounts in premium that could impact the balance sheet.

RECOMMENDED FOR YOU

Much preparation ahead for listing state-owned general insurers

It is anticipated that New India, which is among the largest in the public sector, could be the first to be taken to the listing path

It is anticipated that New India, which is among the largest in the public sector, could be the first to be taken to the listing path

The government is planning to list the public general companies. In his speech, finance minister said that the general companies owned by government will be listed on the stock exchanges. While the process before the actual takes place is expected to be long, sector officials expect this to bring more transparency in their operations.

At present, New India Assurance, United India Insurance, Oriental India and National Insurance, apart from the sole domestic reinsurer General Corporation of India (GIC) are the five public sector general companies. However, Jaitley did not share any timeline of the of these entities.

In his speech, Jaitley said that public shareholding in government-owned companies is a means of ensuring higher levels of transparency and accountability. To promote this objective, he said that the general companies owned by the Government will be listed in the stock exchanges.
Read our full coverage on Union 2016

Prior to this, there have been discussions in the past between finance ministry and these insurers on their possible listing. No company is currently listed on the stock market. It is anticipated that New India, which is among the largest in the public sector, could be the first to be taken to the path.

G Srinivasan, chairman and managing director of New India said that the of the companies could be done in phases and that they have not been told of any timeline. He added that the consultation process for the could begin soon since real action will be taken after that.

Much preparation ahead for listing state-owned general insurers

New India Assurance, the country's largest general insurer, had posted a 31 per cent increase in its net profit for the financial year 2014-15. The insurer had posted net profit of Rs 1,431 crore for FY15 compared to Rs 1,089 crore in FY14. The global business (premium) including Indian and abroad stood at Rs 16,050 crore showing a growth of 12.2 per cent. For FY16, they have set a target of Rs 18,000 crore global (India plus abroad) premium for FY16 and Indian premium of Rs 15,000 crore.

will not only involve overhaul of existing processes, experts point that in the run-up to the Initial Public Offer (IPO) for the on the exchanges the way of functioning of these insurers would have undergo a change. Anuraag Sunder, Director, PwC India said that the government will not only look at the market timing for but also look into whether the entities are ready. "There will be a lot of pressure on the top management of these insurers to better the systems since accountability and transparency would be the main focus," he added.

Before a actually takes place, a clean up of their books and operations would be essential, said industry officials. This would involve bringing down losses across segments like motor third party, group health, fire and engineering among others. Further, underwriting profitability also would be essential to get the desired valuation from the markets.

R M Vishakha, MD & CEO, IndiaFirst Life said that this is the first time that it would be interesting to see the impact that of the company would have on operational efficiencies and results. Underwriting losses still remain a concern in the general industry due to rising claims from segments like motor and health. This means that the premiums collected is not sufficient to meet the demands of claims.

Since they are not listed, no mandate is given to all insurers including public sector insurers to disclose all information on a periodic or quarterly basis like listed companies. Hence, once this happens, not just financial results, other smaller company decisions and activities would need to be made public. The move to initiate of public general companies is expected to bring in greater responsibility and transparency in their operations, according to M S Sreedhar, Managing Director & CEO, Royal Sundaram General Insurance.


Further, experts said that company books would be watched closely not just by the government, but also public shareholders who would then own stake in these insurers. A senior consultant added that this would mean every decision could be questioned by shareholders. making them more accountable and prevent them to indulge in extreme competitive practices including discounts in premium that could impact the balance sheet.

image
Business Standard
177 22

Railway Budget

Widgets Magazine

Economic Survey

Widgets Magazine
Advertisement

Upgrade To Premium Services

Welcome User

Business Standard is happy to inform you of the launch of "Business Standard Premium Services"

As a premium subscriber you get an across device unfettered access to a range of services which include:

  • Access Exclusive content - articles, features & opinion pieces
  • Weekly Industry/Genre specific newsletters - Choose multiple industries/genres
  • Access to 17 plus years of content archives
  • Set Stock price alerts for your portfolio and watch list and get them delivered to your e-mail box
  • End of day news alerts on 5 companies (via email)
  • NEW: Get seamless access to WSJ.com at a great price. No additional sign-up required.
 

Premium Services

In Partnership with

 

Dear Guest,

 

Welcome to the premium services of Business Standard brought to you courtesy FIS.
Kindly visit the Manage my subscription page to discover the benefits of this programme.

Enjoy Reading!
Team Business Standard