Ahead of IPO, National Insurance improved solvency ratio to 1.9 in March

Irdai has mandated a standard solvency ratio of 1.5

In an effort to clean its balance sheet before launching an Initial Public Offer of equity (IPO), central government-owned National Insurance Company (NIC) has improved its solvency ratio substantially, from 1.26 in September 2016 to 1.9 in March 2017.

With the capital position improving, it has asked the government for approval to launch an IPO in the next financial year.

The solvency ratio indicates an insurance company’s financial capacity to meet both its short-term and long-term liabilities.  It identifies whether the company has enough buffer to settle all claims in extreme situations. The Insurance Regulatory and Development Authority (Irdai) has