Non-life insurers are not in a hurry to list their shares on local stock exchanges as their weak financials are unlikely to entice investors in buying the stocks.
"None of the insurance companies are in a position to list their shares. Insurers are not making profits. Their finances are fragile. They are short in solvency and losing money on underwriting. I think insurers will wait for some more time, may be one or two more years till finances improve," Ashok K Roy, chairman and managing director of General Insurance Corporation of India (GIC), said.
He was addressing a seminar on the current trends in the Indian insurance market organised by Indian Chamber of Commerce (ICC) here today.
In September, 2012 Insurance Regulatory and Development Authority (IRDA) issued draft guidelines on initial public offers for general insurance companies.
As per the draft norms non-life insurers exploring fund raising opportunities from capital markets need to have at least 10 years of experience. The insurers will also have to seek prior approval from IRDA for the public issue of shares.
IRDA is yet to release the final guidelines on initial public offers of non-life insurance companies.
Roy, however, expressed optimism that financial performance of general insurance companies will improve in coming years.
According to data available with IRDA, non-life insurers' underwriting losses amounted to Rs 8,817 crore in 2011-12. However, these losses were lower than the previous year, when general insurers lost Rs 9,944 crore. With third-party motor pool being dismantled, insurers are hopeful that these losses will decline further in the current financial year.
At the end of September, 2012 there were 52 insurance companies in India of which 27 were in general insurance business. GIC is the sole national reinsurer.
