ICICI Prudential Life Insurance Company, the country's largest private life insurer, has increased its capital by Rs 230 crore, taking the total capital investment by the promoters to Rs 1,815 crore. | |
| This is the third equity hike during this financial year, taking the capital infusion during the year to Rs 630 crore. The two partners, ICICI Bank and Prudential plc, contributed to the capital in their existing proportions of 74:26 respectively. |
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| "With this capital infusion, our range of products and extensive distribution, ICICI Prudential continues to be well-poised to meet the growth in the coming months. Most of the capital will be used towards meeting solvency margin besides funding the high up-front expenses typical to a life insurance business. This infusion also assumes significance in the context of the company's expansion strategy, which includes opening new offices across the country," said Shikha Sharma, managing director and CEO, ICICI Prudential Life Insurance Company. |
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| As of November 30, 2006, the company had a network of 415 branches and over 146,000 advisors. |
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| In April-November 2006, the company grew 100 per cent over the same period in the previous year, to notch up a new business weighted premium of over Rs 2,279 crore. Its weighted premium market share amongst private life insurers stood at 30.2 per cent for the period. |
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| Fresh capital infusion is a necessity to sustain the growth of a life insurance business in its early years. This is because a number of expenses are incurred up-front, but the revenue, in the form of premia, flows over a 10-15 year time frame. |
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| Hence additional capital is vital to meet the solvency margins and also serves as an assurance to policyholders about the ability of the company to meet its commitments. |
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