vakilkp Posted March 31, 2023 Posted March 31, 2023 Update on IPO. Gist of the story and link below. Go Digit Insurance re-files IPO papers after regulator concerns. Go Digit's latest filing shows it has changed its employee stock rights to stock option plans after approving the plan through a special resolution on March 27. The company, last valued at $3.5 billion by Sequoia Capital, provides general insurance services. https://www.livemint.com/market/ipo/virat-kohli-backed-digit-insurance-re-files-ipo-papers-after-regulator-concerns-11680247861129.html
nwoodman Posted May 23, 2023 Author Posted May 23, 2023 (edited) TLDR : A recent interview with IRDAI Chairman Debasish Panda. 20 applications under way by prospective insurance companies. 2022-2023 2 life insurers one general insurer granted registration. Composite registration - ability to offer a one stop shop under consideration. Insurers, especially Life, seem as sources of patient capital for infrastructure. Marine and aviation opportunities. By way of background, HDFC and Axis Bank have made investments in GoDigit Life but GoDigit is yet to receive a final nod from the insurance regulator for its life insurance license. On March 31, the Insurance Regulatory and Development Authority of India (IRDAI) granted new-age insurer Acko a licence to operate a life insurance business, along with a nod to microfinance company Credit Access to commence a life insurance business. IRDAI closely monitors insurers’ investments, intervenes if necessary: Chairman Debasish Panda "The IRDAI has an extensive framework for regulating and monitoring investments made by insurance companies, which is applicable on both the pattern of investment as well as exposure norms. The exposure norms have been defined for entity level, group level and also the industry level." Dheeraj Tiwari The Insurance Regulatory and Development Authority of India (IRDAI) closely monitors the investments made by insurance companies and intervenes whenever it is deemed necessary, says its chairman, Debasish Panda. There are 20 firms whose applications are being considered for setting up insurance ventures in the country, he tells Dheeraj Tiwari in an interview. Edited excerpts: Questions have been raised about the investment policies of insurers, especially investment made in corporate firms… The IRDAI has an extensive framework for regulating and monitoring investments made by insurance companies, which is applicable on both the pattern of investment as well as exposure norms. The exposure norms have been defined for entity level, group level and also the industry level. Insurance companies are mandated to invest their funds in accordance with the board-approved investment policy. A prudent risk-management framework has also been laid out for insurance companies. The investment wing of the IRDAI closely monitors the investments made by insurance companies and intervenes whenever it is deemed necessary. In addition, the IRDAI has mandated that insurers need to maintain a certain level of solvency margin, which is a measure of their ability to absorb losses. This ensures that insurers have adequate capital to meet their obligations even in the event of a crisis. While the existing regulations are designed to ensure prudence and safety of investments made by insurers, the regulator continuously reviews and updates the same to keep pace with changing market dynamics and to address any emerging risks. Do you think more robust regulations have to be put in place before allowing large companies like LIC to enter all segments of the insurance sector? Allowing composite registration is one of the proposed amendments to Insurance Acts. The intent is to enable a one-stop solution for all insurance needs for the general public. Once the statute is amended, a necessary regulatory framework will be put in place duly addressing all the possible risks and vulnerabilities. However, it must be reiterated that composite registration will still be an option. If a big insurance company with a strong distribution network is able to offer all types of insurance products, it will lead to economies of scale, leading to greater affordability and improved accessibility of insurance coverage. This will also result in better and efficient capital management. Going forward, a risk-based capital regime will ensure sufficient capital is available at all times for the level of business activities and risks being undertaken by the insurance entities. Implementation of IFRS/Ind AS standards will improve transparency and investor confidence. A necessary framework, in terms of a risk-based supervision framework, is also being laid out to keep a check on the risk profile of the insurance companies. What is the key rationale behind the recent regulatory changes and facilitation? The key rationale behind all the facilitations is to make insurance available, accessible and affordable to each citizen and every business of this country. These amendments aim to make the sector business as well as investor friendly. In the financial year 2022-23 alone, three new insurance companies have been registered, two in the life insurance segment and one in the general insurance segment. This comes after a 12-year hiatus in life insurance and a 5-year gap in general insurance. Another 20-plus applications are under consideration with the IRDAI. This indicates that the business environment is favourable and conducive, and investors are getting attracted to the insurance sector. The reforms have created a favourable investment climate for both domestic and foreign investors. There is a demand to push more insurance funds towards infrastructure investment... Insurance companies, especially life insurers, are the providers of long-term patient capital. Recently, investments in debt securities of InvITs and REITs have been allowed in addition to the investment in their units. Further, insurers’ exposure to long-term bonds by banks for financing of infrastructure and affordable housing is treated as exposure to infrastructure or housing. A new credit-rating system has also been recognised for infrastructure. With the objective of de-concentration and diversification and also participation in environmental, social and governance initiatives, insurance companies are encouraged to consider investing in sovereign green bonds. A detailed framework on the pattern of investment along with exposure norms has been provided to ensure safety of the funds while also allowing avenues for diversification. The risk management framework enables the regulator to monitor, review and intervene as and when deemed necessary. We still lack strength in sectors such as marine and aviation insurance… Covering risks pertaining to marine hull and aviation is some of the specialised areas of insurance. These have unique character with a huge concentration risk, require advanced technical capacities to underwrite along with huge capital deployment. The said risks invariably require reinsurance support in order to ensure better diversification and optimum capital deployment. A lot of measures pertaining to ease in doing business have been taken or are under consideration to encourage foreign reinsurers to set up branches in India, like reduction in assigned capital requirements, repatriation of surplus, reduced compliance burden and equitable opportunities. The cross-border reinsurer area is also encouraged to open branches in the domestic tariff area or set up offices in IFSC - Gift City, Gujarat. Efforts are also being directed towards building IFSC – Gift City as a global reinsurance hub, which will lead to improved technical and financial capacities to undertake specialised lines of business. Can you elaborate on some of the innovations which you feel may further drive insurance penetration? With digital technologies such as big data analytics, artificial intelligence, machine learning and mobile distribution models, block-chain, etc., tech-enabled companies including insurtechs are trying to address current challenges and provide innovative solutions. There have been various concepts that have been successfully implemented like pay as you go, pay as you drive, floater policies in motor and wellness & preventive features in health. Further, the IRDAI had announced a hackathon and invited innovative solutions in the areas of automated death claim settlement, curtailing miss-selling, identifying uninsured motor vehicles, fraud mitigation/ prevention, etc. A dedicated. insurtech mission mode team at IRDAI with young and energetic officers are working towards making the sector tech-equipped and facilitating the creation of e-marketplace protocol for insurance. Edited May 23, 2023 by nwoodman
nwoodman Posted June 5, 2023 Author Posted June 5, 2023 A recent article on Digit's entry into the life insurance sector. The article provides some color on the split between Fairfax and Kamesh Goyal in the new entity. Go Digit may enter life insurance in 6 months https://www.livemint.com/companies/news/go-digit-may-enter-life-insurance-in-6-months-11685640600722.html Fairfax Financial Holdings Ltd-backed Go Digit, led by Canadian billionaire Prem Watsa, is poised to enter India’s insurance market with the launch of a life insurance company in the next six months, two people familiar with the plans said. Go Digit will be the 25th firm in India’s insurance sector, which clocked new business premium of ₹3.7 trillion ($US45bn) in 2022-23. Currently, Watsa’s Fairfax, in a tie up with insurance industry veteran Kamesh Goyal, holds ownership of Go Digit General Insurance Ltd, a general insurance company. “The new life insurance joint venture being planned may have Fairfax holding a 40% stake in the firm initially," one of the two people said seeking anonymity. According to the two people, the proposed firm is likely to be named Go Digit Life Insurance Ltd, and will offer a range of life insurance policies. They said the company will have an initial capital of ₹700-1,000 crore ($US 85m-$120m) . Go Digit Infoworks Services Pvt. Ltd, the holding company, is expected to hold 80% as the primary promoter of the proposed JV. Additionally, Goyal and Oben Ventures LLP may collectively hold 40%, mirroring Fairfax’s stake in the company, the first person said. “The balance 20% could be held by banks as non-promoter strategic partners," he added. In response to a query, a spokesperson for Go Digit said: “Go Digit Life Insurance has submitted an application to the Irdai (Insurance Regulatory and Development Authority of India) to conduct life insurance operations in India. As the application is under consideration by the Irdai, we are unable to comment on matters pertaining to the regulatory approval status, proposed partnerships, or the shareholding structure of the company." “Following the launch, the company may place minority stakes with certain banks to strengthen its bancassurance network. This may lead to a proportionate reduction in stakes held by the partners, including Fairfax," he added. Fairfax has been looking to ramp up its investments in India over the past few months. India-born Watsa, while speaking in the India@75 virtual summit had said Fairfax Financial Holdings has invested $7 billion in India and will double it in the next 4-5 years. Fairfax Financial Holdings’ managed assets worth $81.2 billion for the quarter ended March, down 8.37% from a year earlier. The Toronto-based firm owns Fairfax India, whose investments are managed by Hamblin Watsa Investment Counsel Ltd and Fairbridge. Apart from Digit Insurance, Fairfax’s investments in India include Bengaluru International Airport, IIFL companies, National Stock Exchange, Sanmar, Fairchem Organics, Catholic Syrian Bank and Thomas Cook India. Prior to backing Digit Insurance as co-promoter, in 2019, Fairfax had sold its entire stake in ICICI Lombard General Insurance Co. Ltd for ₹2,626.5 crore, ending its 18 -year partnership as an investor. Go Digit Infoworks Services or Digit Insurance is the only startup bet so far by the Canadian investment behemoth in India. The startup, founded by Goyal, was the first unicorn of 2021, a year that saw an entrepreneurial boom with 44 new unicorns. FAL Corp. owns 45.3% in the holding company, Go Digit Infoworks Services Pvt. Ltd, which in turn owns a 83.47% stake in Go Digit General Insurance. On the other hand, Goyal and Oben Ventures LLP together hold 14.96% and 39.79% in Go Digit Infoworks Services. As per regulatory filings, Digit Insurance’s valuation tripled to $3.5 billion after it raised $200 million in July 2021. And now, the company is looking to list its shares on stock exchanges via an IPO. “The life insurance JV by Fairfax and Goyal may see an equally rapid growth, given the increased demand for insurance in India, post the (Covid-19) pandemic," said the first person. SBI Life Insurance is the largest private life insurer at present with a new business premium collection of ₹29,587.6 crore ($US3.6bn) in FY2023. State-run Life Insurance Corp. of India (LIC) is the country’s largest life insurer with a first year premium of ₹2.32 trillion ($USD 27.8 bn) and a market share of 62.58%. Watsa and Goyal’s proposed JV will be entering the business of life insurance at a time when the industry is faced with a new challenge with regards to growth due to changes in taxation rules, especially for the affluent mass. As per the new rules, the proceeds from any life insurance premium over an annual premium of ₹5 lakh ($US6,000) would be taxable from with effect from FY2024 that began on 1 April. However, according to the two persons, initially, Fairfax’s proposed Indian life insurance firm will primarily design small-to-medium ticket size policies, targeting the vast untapped mass of the world’s most populous country. And to do this, Go Digit’s life insurance company is looking to enter into distribution agreements with multiple Indian banks, according to the two persons. To be sure, Go Digit has already roped in private lenders Axis Bank Ltd. and HDFC Bank Ltd. as strategic bancassurance partners with a 9.8% stake each in lieu of an investment commitment of around ₹70 crore ($US8.5m).by each in the proposed privately-held life JV. As a reminder, this is the structure for Digit Insurance https://inc42.com/buzz/founder-kamesh-goyal-owns-over-45-stake-in-digit-insurance/
glider3834 Posted June 7, 2023 Posted June 7, 2023 (edited) Digit market share up to 3.2% Apr-23 - YoY growth rate 39.6% https://www.gicouncil.in/statistics/industry-statistics/segment-wise-report-on-homepage/ Edited June 7, 2023 by glider3834
Mick92 Posted June 7, 2023 Posted June 7, 2023 Nice growth rate. Have they moved out of the liability line? It was significant in the previous year and almost nothing this year.
nwoodman Posted June 7, 2023 Author Posted June 7, 2023 1 hour ago, glider3834 said: Digit market share up to 3.2% Apr-23 - YoY growth rate 39.6% https://www.gicouncil.in/statistics/industry-statistics/segment-wise-report-on-homepage/ Awesome, but even more awesome that you are like a blood hound on the scent. Thanks for posting as the IRDAI figures have not been updated in a while
glider3834 Posted June 7, 2023 Posted June 7, 2023 1 hour ago, nwoodman said: Awesome, but even more awesome that you are like a blood hound on the scent. Thanks for posting as the IRDAI figures have not been updated in a while no worries
nwoodman Posted June 9, 2023 Author Posted June 9, 2023 Excellent news. Digit has become the 26th Life Insurer in India https://irdai.gov.in/document-detail?documentId=3491346 1
glider3834 Posted June 9, 2023 Posted June 9, 2023 On 6/7/2023 at 8:47 PM, Mick92 said: Nice growth rate. Have they moved out of the liability line? It was significant in the previous year and almost nothing this year. yeh comparing health & liability numbers for April maybe there has been some re-categorisation but not sure - I guess we wait for May to see if there is some trend here
glider3834 Posted June 9, 2023 Posted June 9, 2023 (edited) 3 hours ago, nwoodman said: Excellent news. Digit has become the 26th Life Insurer in India https://irdai.gov.in/document-detail?documentId=3491346 thanks - yes exciting news - can they scale rapidly? they have built Digit's brand recognition in India, they have built a partner ecosystem, already have API integrations (couldn't they use these to distribute life products on top of existing non-life?), they have also onboarded banks as minority shareholders/partners for distribution capability using bancassurance model, Kamesh Goyal has experience in life insurance with Allianz - nothing is certain of course but the ingredients look to be there IMHO this was interesting interview covering how they have used tech (AI,ML)/analytics to lower costs, scale quickly, reduce claim time/ improve customer experience 'Technology is the backbone of Digit and ever since our inception in 2017, we have developed multiple tech-enabled solutions that have accelerated our growth in a short span of time. The use of Big Data for business intelligence and data analytics has helped us close the gap between data, insights, and actionable solutions. This has also helped us in being more cost-efficient. We believe in a hybrid model of AI, analytics and human assessment to constantly improve the processes for our customers and partners. We have built ‘smartphone-enabled inspections’ for instant motor insurance pre-inspection using AI and ML. This has eliminated the need for inspection by physical surveyors and has made the process efficient by bringing down the turnaround time from a few days to a matter of 5-10 minutes. Our team is working constantly to make these solutions active for the entire userbase. We also have a system that helps us in detecting frauds through the use of image analytics, AI, and ML. Our integrated API solutions on the cloud help in triggering automatic claim notifications for travel insurance customers if their flight gets delayed beyond 90 minutes. Our tech solutions have also been built for our partner ecosystem to help serve the customers better. The reception of tech integrated solutions has been phenomenal and has helped Digit gain an edge over other players in a short span of time.' https://www.analyticsinsight.net/exclusive-interview-with-vishal-shah-head-of-data-science-at-digit-insurance/ Edited June 9, 2023 by glider3834 1
Viking Posted June 10, 2023 Posted June 10, 2023 On 6/7/2023 at 4:22 AM, nwoodman said: Awesome, but even more awesome that you are like a blood hound on the scent. Thanks for posting as the IRDAI figures have not been updated in a while @nwoodman and @glider3834 thanks for all the info on Digit. Another nice tailwind for Fairfax. Love it.
nwoodman Posted June 13, 2023 Author Posted June 13, 2023 Looks like Digit’s Life Insurance venture isn’t wasting anytime and will be releasing their first product in less than 30 days. You have to take a deep breath, but the opportunities here are pretty staggering IMHO. With the IRDAI potentially green lighting investing a portion of their life insurance float back into infrastructure. This could be one of those formative moments we look back on in 10 years time. The hoops they must have jumped through to get this license is testimony to the brands of both Fairfax and Kamesh Goyal. From the Economic Times: “Go Digit Life Insurance, in which both HDFC Bank and Axis Bank have bought stakes, plans to invest ₹500-600 crore (USD61m-73m)crore in the initial 18 months to start out as the country's 26th life insurer. Promoted by Prem Watsa's Fairfax and industry veteran Kamesh Goyal, the company aims to launch its first product within 30 days. "A large part of the ₹600 crore will be invested into tech and the company will focus on the protection line of business," said a source. The entry of Go Digit increases the number of insurers operating in the life insurance space, marking the first expansion since 2011. Apart from Fairfax and Goyal, HDFC Bank and Axis Bank have each acquired a 9.9% stake in the company. Go Digit received R3 certification of registration on Friday after obtaining R1 and R2 licenses. During this stage, the regulator scrutinises the financial condition of the promoters, foreign investors, and the management's general character. The regulator also evaluates the company's business plan, the expected volume of business, capital structure, and earning prospects. Srinivasan Parthasarathy, formerly the chief actuary of HDFC Life, has been appointed as the CEO, while Sanjay Vij, who previously led bancassurance in HDFC Life, is appointed as the deputy CEO. India's life insurance sector comprises a total of 25 companies, among which the Life Insurance Corporation of India (LIC) holds the dominant market share” 1
glider3834 Posted June 26, 2023 Posted June 26, 2023 https://www.business-standard.com/finance/personal-finance/digit-life-enters-insurance-space-with-maiden-product-group-term-plan-123062600546_1.html
Haryana Posted September 1, 2023 Posted September 1, 2023 Fairfax followers certainly have good vibes about pets (insurance). Digit Insurance partners with Vetina to offer a comprehensive pet insurance plan. https://mintgenie.livemint.com/news/personal-finance/digit-insurance-partners-with-vetina-to-offer-a-comprehensive-pet-insurance-plan-details-here-151692271246518
netcash1 Posted September 3, 2023 Posted September 3, 2023 This is brilliant. Fairfax in June 2022 sold its Pet Insurance to JAB for $1.4B. With Fairfax's deep industry knowledge of the space Go Digit is partnering with Vetina to offer a comprehensive pet insurance plan in India. This partnership has the real potential to grow smartly and quickly and generate significant returns.
TwoCitiesCapital Posted September 4, 2023 Posted September 4, 2023 (edited) 21 hours ago, netcash1 said: This is brilliant. Fairfax in June 2022 sold its Pet Insurance to JAB for $1.4B. With Fairfax's deep industry knowledge of the space Go Digit is partnering with Vetina to offer a comprehensive pet insurance plan in India. This partnership has the real potential to grow smartly and quickly and generate significant returns. Just out of curiosity - does anyone know the cultural comparison of pet ownership in India to the US. I know friends in the US who refer to their dog as their 'child' and spare no expense on them. I would think its questionable to assume it'd be the same in countries with lower relative incomes so am curious how comparable the results will be. Anyone know the culture towards pets in India? Edited September 4, 2023 by TwoCitiesCapital
Daphne Posted September 4, 2023 Posted September 4, 2023 From peanut butter and health drinks to DNA tests for early detection of genetic diseases for dogs, the Indian pet care industry is evolving rapidly with its myriad offerings, amidst rising pet adoption, fuelled by millennials and Gen Z pet parents. Related Article Chandrayaan-3 findings show moon is habitable Industry players say that the cultural shift from mere ownership to the parenting attitude for pets is expected to help grow this industry at 19-20 per cent over the next decade till 2032. The boom is not just in the pet-food segment, which alone is estimated to be at ₹4,000 crore and growing at 25 per cent. Grooming services have mushroomed across cities and pet care platforms are offering everything from interactive toys to health supplements for the furry members of the family. Take for instance: Urban Animal which has launched DNA testing kits to ensure early detection of genetic ailments in dogs to increase their lifespan. Anushka Iyer, Founder & CEO, Wiggles, said pet owners are now converting to being pet parents and this has provided a huge boost to the pet care industry. “Apart from the food category, other segments like vet services, health and wellness, grooming and accessories have become a necessity and are seeing a steep growth. Even the tier-2 and tier-3 markets have been witnessing growth and increased awareness is a factor behind the growth of these markets,” she added.
nwoodman Posted September 12, 2023 Author Posted September 12, 2023 (edited) MS out with a note on August figures for Indian Life…industry growing like a weed. Looking forward to seeing Digit in this table ASAP india_20230907_1625.pdf Edited September 12, 2023 by nwoodman
glider3834 Posted February 11 Posted February 11 (edited) From a valuation perspective, here is an interesting recent M&A/transaction comp for Digit. In Nov-23 Zurich agreed to acquire 51% of Kotak General Insurance for US$487M for an implied valuation for 100% of Kotak General Insurance of ~US$955M https://asiainsurancepost.com/archives/48809 https://yourstory.com/2023/11/zurich-insurance-to-buy-51-pc-of-kotak-general-insurance Digit is writing about 5x more GPW than Kotak YTD & 4x more GPW for current month. Digit has ~2.76% market share vs Kotak's ~0.52% mkt share according to recent flash figures below (below) - Digit's YTD growth rate is 32% vs Kotak's 41%, but Kotak is also coming off a smaller premium base. Edited February 11 by glider3834
giulio Posted February 14 Posted February 14 https://www.livemint.com/market/ipo/go-digit-clears-another-hurdle-on-road-to-ipo-11707838171762.html
Hoodlum Posted February 14 Posted February 14 Nice timing. Here are some additional details. https://www.magzter.com/stories/newspaper/Mint-Mumbai/GO-DIGIT-IPO-GETS-IRDAI-GOAHEAD The company is now waiting for approval from the Securities and Exchange Board of India (Sebi) for the initial public offering (IPO), the people cited above said on condition of anonymity, adding that they expect approval soon enough. In November, Digit General Insurance, which runs Go Digit, filed an addendum to its IPO documents, stating that Irdai had issued it a showcause notice related to its "non-disclosure of change in the conversion ratio of the compulsorily convertible preference shares, issued to Fairfax." The company is likely to go public in the first half of 2024, one of the two people cited above said.
nwoodman Posted February 14 Author Posted February 14 5 hours ago, giulio said: https://www.livemint.com/market/ipo/go-digit-clears-another-hurdle-on-road-to-ipo-11707838171762.html Sounds promising, although “these two people” have quite the reputation. Hopefully the IRDAI provides confirmation shortly
SafetyinNumbers Posted February 15 Posted February 15 6 hours ago, nwoodman said: Sounds promising, although “these two people” have quite the reputation. Hopefully the IRDAI provides confirmation shortly I read that as IRDAI approval has been received and the two people were referring to SEBI approval. The Rupee has weakened since 2022 when they filed the initial IPO. At the time the suspected IPO valuation was $4.5-5b. On the same basis, the low end would be down to $4b. It’s grown a lot since then but perhaps there has been some multiple contraction. It looks like the plan is to sell 12.5% of the company with $150m being fresh issue and the rest from promoters. I don’t know if that includes Fairfax selling some. If anyone has any colour, please share.
nwoodman Posted February 15 Author Posted February 15 39 minutes ago, SafetyinNumbers said: I read that as IRDAI approval has been received and the two people were referring to SEBI approval. The Rupee has weakened since 2022 when they filed the initial IPO. At the time the suspected IPO valuation was $4.5-5b. On the same basis, the low end would be down to $4b. It’s grown a lot since then but perhaps there has been some multiple contraction. It looks like the plan is to sell 12.5% of the company with $150m being fresh issue and the rest from promoters. I don’t know if that includes Fairfax selling some. If anyone has any colour, please share. I believe MINT broke this news. It is unconfirmed IRDAI approval as far as I can tell. Sounds promising, hopefully Fairfax confirms tonight or on the CC as I couldn’t find anything on the IRDAI website….yet
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