Business Standard

LIC IPO: How the embedded value of the insurance behemoth was calculated

Shareholders get more say on how LIC treats its profit and policyholder's interest

LIC IPO
Premium

Subhomoy Bhattacharjee New Delhi
When you buy an insurance cover for your car each year, the agent asks a question—what do you think is the value of the car! In insurance jargon it is the insured’s estimated value or IEV. 

It is this same question that LIC has been asked and which forms the basis of its share sale. What is the IEV of LIC? It has been reckoned upwards of Rs 5 trillion. 

To reach that number, the government of India has offered a change in how the largest life insurer distributes the surplus it receives from its business between the policy holder

What you get on BS Premium?

  • Unlock 30+ premium stories daily hand-picked by our editors, across devices on browser and app.
  • Pick your 5 favourite companies, get a daily email with all news updates on them.
  • Full access to our intuitive epaper - clip, save, share articles from any device; newspaper archives from 2006.
  • Preferential invites to Business Standard events.
  • Curated newsletters on markets, personal finance, policy & politics, start-ups, technology, and more.
VIEW ALL FAQs

Need More Information - write to us at assist@bsmail.in