Financials
LIC’s share of a stagnating market declines - promised growth of insurance penetration a mirage? With LIC’s IPO deferred until next year, prospective shareholders have time to examine a disturbing trend in India: life insurance penetration has stagnated (and even fallen) in recent years. All discussion of the purported original purpose of opening up (to secure long term funds for infrastructure investment) have been abandoned. New players' strategies have just been to target the more profitable end of the market, leaving India’s largest life insurer, stuck with the lower end.
Edition: 132
- 01 April, 2022
Life Insurance Corp of India (1248Z IN)
Financials
India’s largest ever IPO - the government is looking to raise ~US$8bn for its 5% stake. In his 19-page report, Sumeet Singh runs the rule over this behemoth in the Indian life insurance space (market share of 60%+ in terms of both GWP and NBP). Positives: 1) Distribution strength stemming from its agent network. 2) Brand strength. 3) Industry growth expected to stay strong. Negatives: 1) Losing market share to private players. 2) Digital sales issues. 3) LIC has repeatedly been used to rescue government linked listings (most recently IDBI Bank). 4) Solvency ratio appears low vs. peers.
Edition: 130
- 04 March, 2022