Government ownership of life insurance corporations is one of the biggest obstacles.
Whether it is life insurance or other corporations, they need money to make heartbreaking statements like ERVO issuance, autonomy, ‘minimum government, maximum governance’, to turn their heads, clumsy or anti-popular policies.
It is not surprising that the first trading of the shares of Life Insurance Corporation started with a lower price than the selling price. In fact, the sale of shares to the corporation was more of a hindrance than an impending marriage. No decision has been made before, so it is not clear how much capital should be sold, if so the market situation is a barrier. While this seems to be improving, Russian President Vladimir Putin has declared war on Ukraine. I mean, the market just sat there. So the government had to change its decision to sell the original five per cent stake. Shares fell 1.5 percent to 3.5 percent. Their value has also declined. But it is better to be very satisfied than to have nothing! Because of the goatish elegance of the whole government that came from this. The fiscal deficit does not fill the reputation of the torso or the fly does not fly. However there is no doubt that the sale of these shares has received a good response as the goodness of life insurance is still intact. You too can invest in a life insurance company. ‘ It is worth noting that many of these are investors. That is, they are not speculators who want to make money today and sell shares if the price rises tomorrow. So even if the value of life insurance stocks falls on the first day in the open market, these investors should not be disappointed. But the time has come for this corporation, which has the capacity to sell gold, to think about why it is time to sell gold. Only one aspect is responsible for this. That is the government.
It could be a life insurance corporation or an oil or natural gas corporation or whatever. The need to spend money on unscrupulous policies or populist policies is to turn the heads of these corporations and confront the ERVs with a heartbreaking declaration of relaxation, autonomy and, more recently, ‘minimum government, maximum governance’. This means that no matter how much the government says, these corporations are not getting the commercial and financial freedom they hoped for. Therefore, despite their capacity, the management of these corporations is almost identical financially. It’s not good. In the case of the Life Insurance Corporation, it is comparable to almost two and a half dozen other private companies in the field of corporation and life insurance. It should be noted that doing so will result in higher returns on insurance for customers of private insurance companies than for life insurance corporations. As a result, the life insurance business is losing ground compared to the private service providers, while the business of the private insurance corporation is booming. The ratio of annual insurance premiums to life insurance companies paid by retail insurers has also begun to decline and whatever happens in the valuation of a share sale should be a major warning to the corporation. Her government may or may not notice, but as an investor, people need to understand this problem and the reasons behind this fact.
There are two main reasons for this. The first is the question of whether the life insurance corporation pays for the insurance. In order to get a good return on your investment, the corporation needs to invest this money in certain places. The most important investment options are capital market stocks or public / private bonds. The first gives more returns and the second gives more stability. The higher the return, the higher the risk and the greater the stability, the lower the return.
Private insurance companies invest more in the capital market than in life insurance corporations. The capital market is said to have accumulated in the stomachs of some myths. Everything there is a lie. But there is no substitute for this market for good returns. The difference is that investing in the capital market is a multiple of earnings and the other way around is just the sum. Deals with insurance shares of private insurance companies. But Life Insurance Corporation does not use this option so widely. Therefore, the direct investment of a corporation in the capital market is not even 25%. This means that most of the corporation’s investment is in debt securities. Most of these bonds are government bonds. That is, when government bonds do not grow as much, the life insurance corporation is responsible for pouring money into these bonds. That means a large amount of your money paid for life insurance corporation’s insurance goes into government debt securities. It is also supported by some gentlemen who have been accused of nationalism. They should. But at the same time do not expect good returns from Life Insurance Corporation. It is impossible to get a loan from the government and repay a good one at the same time. This is the first reason. And the Life Insurance Corporation actually serves as the government’s investment arm for the capital market; This is another. Shares of companies that the government ‘should not fall’; Life Insurance Corporation is responsible for investing in the companies it wants to sustain. Most of these companies are state-owned. This means that the Life Insurance Corporation buys large sums of shares of government companies that are not in high demand from ordinary investors. Even for that, the money you pay for insurance will be used. This means that only the name of the corporation has autonomy. No matter how elusive its autonomy was, when the time came for IDBI Bank to go bankrupt due to arrears, the order came from above to Life Insurance Corporation and this corporation spent your money to save IDBI. If this corporation were truly autonomous as a private company, would it have dared to enter into a damaging agreement to protect the bank? You do not have to be an expert in economics to answer this question.
It is important to consider the risks faced by each company when listing in the capital market. The biggest risk of investing in a life insurance corporation is ‘extra control over promoter management’. The ‘promoter’ is the government. This means that government ownership is the biggest obstacle behind multiplying investment in life insurance corporations. Recently, many people like to ask what has happened in the country in the last 70 years. Excellent systems such as the Life Insurance Corporation were established during these 70 years and efforts to incorporate them also began during these 70 years. The speed of this slaughter has increased a lot recently and it is clear from the status of the life insurance company that only so-called cow lovers are taking care of such ‘dairy’ cows.