Reliance General to Sell 10% Through IPO in FY18

Reliance General Insurance is looking to sell 10% through initial public offering in this financial year. It plans to sell 25% in the next three year. Reliance General is the fourth general insurance company to have announced its intentions to list.Today, board of Reliance General Insurance approved plan to independently list on the exchanges.

The listing process will be completed by this financial year subject to regulatory approvals.

“The General Insurance industry is slated to grow with the economy where affluence led consumption will act as its primary growth driver," said Rakesh Jain MD and CEO Reliance General Insurance. "The listing will enable retail investors to participate in this high growth and new wealth creation opportunity.”

The industry has been growing at 16-18% on a year on year basis. It grew by 32% last year, with the contributions of crop insurance which emerged as a significant segment for insurers. Reliance General reported 40% growth in gross written premium to Rs 4,007 crore as on March 31 2017. It has networth of Rs 1257 crore.

Reliance General had reported profit before tax of Rs 130 crore. It has combined ratio of 120%. Combined ratio is a measure of profitability for general insurance companies. Combined ratio below 100% shows that company is making profit in writing core business. cking value for all stakeholders. Reliance General is a 100% owned subsidiary of Reliance Capital. The company has share capital of Rs 126 crore. It has reported underwriting losses of Rs 300 crore during the last financial year.

A general insurance company's underwriting losses is offset by investment income. The investment book was up 25% to Rs.6,724 crore for the year ending 31st March, 2017. The Company has a diversified distribution network through partnerships with banks including IndusInd Bank, Catholic Syrian Bank, Andhra Bank and Bank of India. Reliance General has been for a strategic partner for over last four to five years. It will continue to look at inorganic growth as well as strategic partner post IPO. "We are open to strategic partnerships even post listing," said Jain. The company operates through 129 branches and 24,500 agents across the country.