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National Insurance Company is facing a major solvency shortfall of ₹8,000 crore, with its solvency margin at a negative 0.49%, far below the required 1.5%. To address this, the company has identified key assets for potential sale, including its 20% stake in India International Insurance Singapore (valued at ₹4,000 crore), its share in Agriculture Insurance Company, and a joint venture in Kenya. However, the sale process has not yet started.
The Insurance Regulatory and Development Authority of India (Irdai) has given the company some leeway, so there’s no immediate pressure to sell. National Insurance is hoping that an upcoming shift to a risk-based capital framework could improve asset valuations by as much as ₹6,000 crore.
Currently, the company’s market share has dropped to 5.11%, and its gross premium fell by 5.84% in the first half of this financial year, as it pulled back from riskier segments. National Insurance is also banned from writing surety bonds until its solvency situation improves.
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