Oriental Insurance net profit up 75%

Oriental Insurance Company has reported a 75% jump in net profit from Rs 283.91 crore in the previous fiscal to Rs 497.27 crore for 2006- 07. The OIC chairman and Managing Director, M. Ramadoss said that the growth in profit is due to detariffing of the prices on insurance products from January, rise in business in certain sectors and cut in losses on motor insurance.

The company also declared a dividend of 100% as against 50% as against 50% in 2005- 06. Gross collection premium collections rose from Rs 3609 crore to Rs 4020 crore to Rs 4020 crore during this period.

Business Restructuring being planned by PSU general insurers.

Public sector general insurers are looking forward to restructuring their business. A business transformation exercise is being planned by New India Assurance, Oriental Insurance and United India Insurance, which will include business process restructuring to stay a step ahead in competition.

All these general insurers have initiated independent processes to appoint global consultants who will plan out strategies to be worked on for the next 10-15 years. All price controls are going to be completely removed by the regulator from September 2007.In time to come, i.e. from April 2008, this sector will have the freedom to lay down their terms and conditions for their policies.

A senior National Insurance official has told the media that they are preparing themselves to face competition in time to come. Business restructuring is a part of this preparation.

LIC & three banks to sell stakes in UTI AMC issue

Life Insurance Corporation of India along with three major banks State Bank of India, Punjab National Bank and Bank of Baroda will jointly divest 50% of their holdings in UTI Asset Management (UTI AMC) in the forthcoming IPO of the fund house.

As per the current scenario, the divestment of just half of their original equity holding in the AMC will enable these entities to bring out well over Rs 1,236 crore. This is the amount they paid to the government to take control of the firm in 2005. The sponsors can hope to capitalize on further gains after the listing. A official associated with the transaction has said that the dilution of their holding will be restricted to 50% now as UTI AMC has to maintain its PSU character marked by it being controlled by state owned entities in order to manage the new pension scheme.

The proposal, which is now awaiting the approval of the finance ministry, envisages the four sponsors of the asset management company diluting their individual stake by 12.5% each through an offer of sale in the IPO of UTI AMC. A clause in the agreement between the four sponsors of UTI AMC and the government dating back to 2005 makes it mandatory to seek the approval of the finance ministry before any change in ownership is done. The proposed listing of the AMC will be a first in the local markets

UTI AMC has assets under management of over Rs 40,000 crore. Besides, it has a venture fund firm based in Bangalore, manages portfolio investment for overseas investors and an India dedicated offshore fund in London. Taking all these into account the valuation could help the sponsors encash more than their original capital investment. The profits of the fund house were estimated to be close to Rs 150 crore during the last fiscal.

Lotus India AMC launches Lotus India Growth Fund

Lotus India AMC, a joint venture between Fullerton Fund Management Group and Sabre Capital Worldwide, has announced the launch of open-ended diversified equity scheme, Lotus India Growth Fund.

Long term growth of capital by investing in a diversified portfolio of predominantly equity and equity-related securities. is investment objective of the scheme .The new fund offer priced at Rs 10 per unit (plus applicable entry load) will open for initial purchase from Jul 9 and closes on Jul 19. The fund will re-open for ongoing purchase/redemption by August 4. The fund will invest 65-100 per cent in equity and equity related instruments and 0-35 per cent in debt and money market instruments.

Lotus India Growth Fund is an open-ended diversified equity fund, which has the flexibility to invest across companies without having any bias towards a particular sector, investing style or market capitalization. It can invest across large cap, mid-cap or small cap stocks; across growth, value or blend stocks. The fund can also invest across lifecycles - across "momentum", "attractive" and "contra" stocks.

Tridib Pathak, chief investment officer – equities, will manage the fund. Ajay Bagga, chief executive officer, Lotus India AMC has said that Lotus India Growth Fund will help investors capture the growth potential of corporate India in a comprehensive manner.

Reliance Capital to invest Rs 2000 crore in Life Insurance

Reliance Capital is planning to invest over Rs 2,000 crore in its life insurance business in the next few years. Reliance Capital Chairman Mr. Anil Ambani, while addressing the shareholders at the company’s AGM on Monday said that, they are planning to infuse over Rs 2000 crore in life insurance business in the next few years.

It is being observed that Reliance is the only business group to enter solo in life and non life insurance business. Apart from Sahara group and now Reliance, all other private companies have roped a foreign partner. As per present laws, up to 26% foreign investment is allowed in an insurance company.

Reliance’s growth ambitions are reflected by its move of recruiting several lakhs of agents during the current fiscal. The company is using health insurance to build up its retail relationships in the non- life sector.

The company's life insurance business has a pan-India presence with total 16 products. At the end of the year March 2007, Reliance Life Insurance mobilized new premium of Rs 930 crore, showing a growth of 381%. This is the highest growth recorded among life insurance companies.

LIC set to venture in Health Policy zone.

The largest financial institution in the country, LIC has decided to introduce health policies later this year. LIC has created a separate health insurance department in their corporate set up as reported by Mr. T.S.Vijayan, the chairman of LIC.

This new health insurance department is all set to bring out some innovative efforts. In the latter part of the year, LIC will be coming out with their new initiatives. The company is gearing up to build a strong technology plateform and a strong marketing network for selling their new health insurance product.

LIC is also having tie-ups with third party administrators.