State-owned general insurers have welcomed the Budget proposal to take them public saying the move will help increase their brand value.
Even the private sector general insurance companies also believe that they can plan for getting listed once their peers in the government sector do so.
The sectoral regulator IRDA has already come out with broad contours of listing of general insurance companies. The industry also feels that automatic clearance of FDI proposals will boost the flow of foreign capital to the sector.
Finance Minister Arun Jaitley today proposed listing of the four wholly-owned state-run general insurance companies.
"We propose to undertake important banking sector reform and public listing of public sector general insurance companies and also undertake significant changes in FDI policy," he said while unveiling the Budget.
There are four public sector general insurers -- New India Assurance Company, National Insurance Company, Oriental Insurance and United India Insurance.
"The government has announced its intention for listing of all the four state-owned general insurers and we are fully geared. As soon as the government takes further steps towards listing, we will certainly fall in line," New India Assurance chairman and managing director G Srinivasan told PTI.
"We can quickly begin the valuation exercise whenever we are asked to do so by the government as part of the listing exercise," said Srinivasan who is also the chairman of General Insurers' (Public Sector) Association of India.
"The objective is to create more transparency which will result in better branding and participation in our shareholding pattern will increase in this way," he noted.
Listing of PSU general insurers has been in the air for quite some time. After the PSU manufacturing sector and the banks, there was speculation that the government would move to other financial institutions for listing as well.
"There is a lot of hidden wealth in these state-owned general insurance companies in terms of market value of assets they hold, brand equity, trust of their customers and other such parameters. There lies a lot of embedded value in these companies and hence we believe that the real valuation will make a very attractive proposition for the investors," National Insurance Company's newly-appointed chairman and managing director Sanath Kumar said.
