Posts Tagged ‘Life Insurers’

Private Sector Life Insurers Sailing in Choppy Waters :(

Private insurers sailing in choppy waters

Even after 8 years in operations, most of the companies seem to be sailing in choppy waters while the latest profit/loss numbers reveals that almost all of the 22 companies are still making losses.

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Net losses of the private sector life insurers have risen to a whopping Rs 4850 crore during the last fiscal from 2001-2002, showing a uncanny rise of over 2000%.

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However, Reliance Life has suffered the highest loss of Rs 1085 crore and its pool of the policy holders fund is a meager Rs 50 crore.

Moreover, ICICI Prudential Life is sitting on a net loss of Rs 780 crore while the cushion for policy holders is Rs 200 crore.

As for Birla Sunlife, the loss amounts to Rs 700 crore with a 130 crore surplus for the policy holders fund while HDFC Standard Life has netted losses of Rs 500 crore with a policy holders fund of 160 crore.

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Additionally, IRDA is looking at the numbers very closely now and is also doing a check on the risk profile of individual companies and trying to build in a system of early warning given the fact that life insurance is a long gestation business.

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Meanwhile, it is the speedy expansion in business that has cost the companies dear and the coming days will see a change in strategy.

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At the same it is said that such multi million losses may hit valuations of private life insurers especially if the companies are keen to list on the stock exchanges.

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