General insurers need Rs.37,000 crore capital to grow at 20% in next 5 years

Date posted: Wednesday 2 August 2017

Life insurance industry is expected to grow at 15% to 18%, general insurance industry will grow at 20% this financial year, said rating company Icra. While general insurance industry will require Rs. 37,000 crore capital over the next five years, life insurance will not need capital in the near to medium term. While the actual capital requirements will be dependent on the business mix, growth rates and the claims experience, the rating company estimates that, to maintain a solvency at 1.65 times (as compared to the regulatory requirement of 1.5 times) while growing at a CAGR of 15-20% and maintaining similar claims records, the General Insurance industry would require around Rs.37,000 cr. of capital over the next five years with the requirement for the private sector pegged at around Rs.9,000 cr. With few of the companies considering listing themselves on the stock exchanges, Icra believe that in addition to providing a route for the promoters to monetize their investments, the industry could also see some rationalization in product pricing as companies would also look to shore up their net profits.

(Economic Times)

Tags: ,