News eDaily12 Jun 2017

India:Nonlife insurers tap non-equity channels to raise capital

12 Jun 2017

Nonlife insurers have found a new alternative in subordinated debts or hybrid bonds to raise capital.

As many as seven of the 31 nonlife insurance companies have raised INR2,181 crore (US$338.7 million) in the financial year ended 31 March 2017 through hybrid bonds,  reported Press Trust of India citing the rating agency CRISIL. More issuances of such bonds are expected.

Mr Gurpreet Chhatwal, president of CRISIL Ratings, said, “Subordinated debt issuances have emerged as a very good alternative to equity as they enable insurers to raise capital at an optimal cost. Hybrid issuances will gain impetus, given buoyant growth prospects for non-life insurers.”

The first hybrid bond issuance was in July 2016, after IRDAI allowed in late 2015 insurance companies to raise capital through non-equity forms such as preference shares or subordinated debt.



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Regen Verhinderer

Investors watch out. Don’t put your hard earned money in these companies. All the insurers in India compete with each other to settle fraudulent claims. Clean and competent surveyors /loss adjusters are not given jobs because they stand against fraudulent claims. For technology claims they will send surveyors who not electronics engineers. They will send a CA surveyor for a cclaim from a chemical factory. Like that in all disciplines of claims. Infact 90 percent of fraud settling surveyors are not techies and therefore incompetent. These surveyor are willing to pay 10% of their survey fees as bribe to the appointing office. The insurance broker facilitates this transaction. The big fraudulent claimants are from India Inc who insure their NPA s to make the insurers to pay for their CAPEX. Therefore the shares will have no market value. They will not be able to pay dividends for the preference shares. CRISIL has no idea how general insurance in India works. So the ratings they give cannot be relied upon.

12 June 2017

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