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Public listing of LIC on the cards as Modi weighs next big-bang reform

LIC holds two-thirds share of India's life insurance market .

ETMarkets.com|
Updated: Jul 29, 2019, 08.33 PM IST
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Govt may look to list LIC as part of Modi's next big-bang reform
Govt may look to list LIC as part of Modi's next big-bang reform
The Government of India may look at listing of Life Insurance Corporation (LIC), the public sector insurance behemoth, as part of the Modi Government's next big-bang reforms.

LIC holds two-thirds share of India's life insurance market .

ETNow on Monday reported that talks on listing of LIC are at an early stage and an IPO may be planned going forward.

“The government is exploring legal opinion on the amendment of LIC Act for public listing,” ETNow reported quoting sources.

It said the government was looking at two different views on the listing of LIC: A public listing will make it transparent and better run while at the same time it will also turn the insurer bottomline-focused and make it hard to bring down life insurance premiums.

The Department of Investment and Public Asset Management (DIPAM) and DFS are exploring the pros and cons of listing the insurance company. “Listing of LIC is among the long-term reforms agenda of the Modi government,” ETNow said, quoting sources.

Capture

From the insurance sector, companies like ICICI Prudential Life Insurance, ICICI Lombard General Insurance, SBI Insurance, General Insurance Corporation of India and HDFC Life Insurance have already got listed on the bourses.

June data showed the only state-owned life insurance firm witnessed more than two-fold jump in new premium collection to Rs 26,030.16 crore, up from Rs 11,167.82 crore in the same period last year. With this high growth in business, the market share of the insurance behemoth increased to 74 per cent.

Remaining 26 per cent is shared by rest of the 23 private players operating in the space. LIC sold 13.32 lakh policies in June to collect over Rs 25,000 crore in just one month. Private sector players witnessed an increase of 14.10 per cent in their collective new year business premium at Rs 6,211.17 crore in June, as compared to Rs 5,443.75 crore collected in the year-ago month.

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