It is quite possible that the public issue of GIC Re will raise the cost of insurance cover in India.
This means insurance rates for health and accident cover the government is promoting so assiduously, for all Indians will be higher for state budgets. The positive is that the massive undercutting of premiums in health and motor business by insurance companies could now judder to a stop.
India’s national reinsurer has filed the draft red herring prospectus for a public issue with the capital markets regulator, Sebi on Monday. The management of the company led by its chief Alice Vaidyan are on road shows abroad to drum up interest for the expected Rs 10,000 crore issue (of course the share price for the sale has not been notified as yet). By all indications the issue could hit the market around Diwali, this year, India’s festival season.
