Jio Financial Services: Here is what CSLA says about JFS plan to enter insurance sector
Life insurance. The company has allocated a capital basis of Rs. 10 billion for each of the enterprises, according to media reports.
An additional media piece said that both companies had commenced hiring, with a few former PSU officers joining Jio, as per CLSA report. In India's insurance market, there are more than 55 participants, of whom 26 are life insurers and 31 are general insurers (which also include five independent health insurers). Total premiums written in FY23 by Indian life insurer was US$98 billion and general insurers was at US$32 billion, as per the report.
Also Read: Jio Financials lists at ₹262 per share on NSE and ₹265 per share on BSE According to the brokerage's report, life insurance is a long-term product, with premium and claim cash flows stretching over many years. Furthermore, there are a number of standards related to investments and products in this highly regulated sector. "It has the ability to raise awareness for insurance as an investment product in deeper/wider geographies along with better pricing to improve protection penetration, and could be a key focus area for Jio.
We estimate that an ₹10 billion net worth could a imply sum assured of about ₹1,200 billion- ₹1,800 billion, assuming 2.5x-1.5x solvency ratios. In comparison, SBI Life has a sum assured of ₹18 trillion as of March 2023," said CLSA in its report. Also Read: Jio Financial Services Listing Highlights: JFSL shares close at 5% lower circuit at ₹251.75 apiece on listing day There are several separate subsectors within the general insurance industry, and each has a distinctive business model.
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