Universal Sompo General Insurance Company which is one of the last entrants in the non-life insurance sector announced that it has raised Rs.200 crore of equity from its promoters. Universal Sompo is a joint venture between Allahabad Bank, Karnataka Bank, Indian Overseas Bank, Dabur Investments and Sompo Japan Insurance.
All the five promoters collectively added Rs.200 crore to the capital in accordance with their existing shareholding in the company. This infusion of additional capital comes after IRDA’s notification to all insurers to maintain their solvency margin.
The officials at Universal Sompo said that the fresh capital will be primarily used to expand the business and simultaneously maintain the solvency margins as prescribed by the IRDA. Like other non-life insurers, Universal Sompo too booked underwriting losses in the last financial year but the additional infusion of capital by promoters clearly suggest that they are very bullish about the growing insurance business in India.
As of 31st December 2011, the Available Assets in Policyholders’ Funds of Universal Sompo is Rs. 35,792.89 lakhs. The Total Available Solvency Margin [ASM] of Universal Sompo is Rs. 6,244.70 lakhs as against the Total Required Solvency Margin [RSM] of Rs. 5,965.27 lakhs. Therefore, the Solvency Ratio (Total ASM/Total RSM) of the company is 1.05.
