INDIA'S public sector insurer, Life Insurance Corporation (LIC), has officially opened its wholly owned subsidiary in Singapore.
LIC (Singapore) Pte Ltd will expand the group's global footprint into South-east Asia and become its 13th international operation joining its network of offices in London, Fiji, Mauritius, Bahrain, Nepal, Sri Lanka and Kenya, among others.
LIC is the largest life insurer in India with assets of S$294 billion, a network of 3,500 offices, 290 million customers and 1.27 million agents. Settling claims amounting to S$15 billion in the financial year ended March 2012 itself, the financial group's business expands into life insurance, mutual funds, housing finance, pension funds, credit cards and care homes.
The head of LIC's operations in Singapore, K Kadiresan, highlighted that there is great potential for the company to carve out a niche in the market here. The CEO of LIC (Singapore) said the company will bring with it its tremendous experience of handling a large and diversified insurance market, such as India's, over the past 56 years. Mr Kadiresan expressed confidence that LIC will add value to the customers and market here and would strive to be a hub of operation in the South-east Asia region.
LIC is, however, not new to Singapore, having already had a representative office here. However, its previous attempts to set-up a wholly owned subsidiary failed as it was not granted regulatory approval to do so.
According to media reports, LIC's attempts to seek approval from the Singapore authorities to obtain a licence to set up operations and sell insurance policies here failed as it did not have any rating in place then.
That issue has since been resolved as it received a rating from international credit rating agency Moody's Investor Services in 2011 when it also upgraded the Indian government's sovereign rating to "BA1" for the financial year ended March 2011. The rating not only evaluates a country's financial and political climate, it also suggests its ability to repay loans.
Although LIC's paid-up capital was a nominal sum of S$1.15 million, according to reports, it received a sovereign credit rating on India as the government provides a guarantee for every policy it issues.