The initial public offerings (IPOs) of two government-owned non-life insurers, United India Insurance and Oriental Insurance, are likely to be deferred to the end of 2018.
This is because while the government had given the go-ahead for the public listing of state-owned general insurers in 2016, the two insurers are in the process of shoring up their solvency ratio to 150%.
“We are waiting for the solvency margin to touch 1.5 as per the regulatory requirement. Post that, the decision on how much to divest and the pricing would be taken. It (IPOs) could be around December 2018,” reported Moneycontrol, citing an official close to the development.
Under IRDAI rules, insurers are required to maintain 150% solvency at all times. The two insurers have been given time to pump in more capital to meet the minimum solvency requirements.
Oriental's solvency is still below 150%, standing at 111% at 31 March 2017. The solvency ratio was 118% at 30 June. United India’s solvency stood at 115% at 31 March and 110% at 30 June.
Another state-owned insurer which is planning an IPO is National Insurance. It is expected that the company would launch an IPO by 31 March 2018.
Among the public sector general insurers, GIC Re and New India Assurance are already listed on the stock exchanges.