IndiaFirst Life Gears Up For D-Street

IndiaFirst Life Insurance was among the fastest growing private life insurers in India in terms of New Business Individual Rated Premium (IRP) in FY 2021-22, according to a Crisil report. The firm significantly benefits from its relationship with its promoters – the largest shareholder – Bank of Baroda (BOB) and Union Bank of India (UBI). As of 31 March 2022, its association with BOB and UBI provided it access to an aggregate of 260 million customers through 17,587 branches across India.

IndiaFirst Life Insurance recorded the highest growth in New Business IRP among life insurers with PSU bank parentage, with a CAGR of 27.3 per cent for the five years ending FY2021-22. This was a noteworthy achievement considering that the Indian private life insurance industry grew at a CAGR of 13.9 per cent during this period.

R.M. Vishakha, Managing Director and CEO, IndiaFirst Life Insurance, says that when she joined the insurance firm, it was the 19th largest player in the industry. At the end of FY2022-23, IndiaFirst Life Insurance ended up as the 10th largest player in the industry.

Maiden Issue & OFS

The company seeks to raise Rs 500 crore through a fresh issue of equity shares and an offer-for-sale (OFS) of up to 141,299,422 equity shares by the promoter and other selling shareholders. IndiaFirst Life Insurance filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) in October last year and got the capital market regulator’s nod for its initial public offering (IPO) on 15 March. 

Issue to Augment Capital Base

The company proposes to utilise the net proceeds from the fresh issue to augment its capital base to support solvency levels in the current fiscal. “Life insurance firms are measured using a host of metrics and terminologies, but from a value perspective, it is the firm’s group protection and individual new business and renewal which contributes to long-term value,” explains Vishakha. 

Being a relatively new entrant in the life insurance industry in India with significant headroom for expansion, the life insurer believes that its track record of consistent and rapid gain in market share, strategic focus on profitable growth, strong market penetration, a high-performing agent network, and significant technological investments focused on customer experience and operating efficiencies, will enable it to effectively capitalise on the growth opportunities in the Indian life insurance industry

Strength in Tech

Vishakha sees the life insurance industry introducing more products in customer interest and firms and having far more effective distribution channels. She says the firm is very tech-savvy. “More than 97 per cent of our applications and almost 99 per cent of our transactions are digital. Our focus on technology and backend distribution has been our strength, and we have leveraged on it extensively,” she says. Vishakha recalls how even before Covid, the company had zero cash transactions and paper, attributing it to the firm’s 25 per cent growth that year compared to an industry growth of five per cent.