IndiaFirst Life Insurance plans to raise ₹150-250 crore through subordinated debt in the fourth quarter to strengthen its capital base, as reported by The Economic Times. The proposed fundraise will come as the insurer's existing subordinated debt of about ₹125 crore falls due for repayment in the fourth quarter. The company maintains a solvency ratio of above 190% against the minimum regulatory requirement of 150%, and does not need fresh equity capital from shareholders, according to managing director and CEO Rushabh Gandhi. The insurer has headroom to raise subordinated debt and does not plan to reduce its agency force due to AI adoption, but expects higher productivity and redeployment of employees into more complex roles.
IndiaFirst Life Insurance will reassess its initial public offering plans following regulatory approval for BNP Paribas Cardif's stake acquisition. According to reports from The Economic Times, the insurer will sit with its new shareholders to decide IPO timing and file the draft red herring prospectus again. IPO plans have not been shelved, it has just been deferred after the company received regulatory approval for the strategic transaction. The company is likely to revisit its IPO plans after the new shareholder structure is in place, with plans to list when market and business conditions are appropriate. The transaction is expected to close this calendar year, with the company having to file a fresh draft red herring prospectus.
In July, BNP Paribas Cardif announced plans to acquire a 26 per cent stake in IndiaFirst Life Insurance from Warburg Pincus, subject to regulatory approvals. As reported by The Economic Times, post-completion of the transaction, IndiaFirst Life's shareholding will comprise Bank of Baroda's 65 per cent stake, BNP Paribas Cardif's 26 per cent stake*, and Union Bank of India's 9 per cent stake*. The company views Cardif as a strategic investor who could bring access to global partnerships, technology and data capabilities. The insurer is also seeking new bancassurance partnerships following the reduced contribution from Union Bank of India, with Gandhi stating the company is open to both private and public-sector banks.
According to The Economic Times, the insurer is focusing on its agency channel expansion while maintaining its bank-led multi-distribution approach. Currently, bancassurance accounts for 60-70 per cent of business, while the agency channel contributes around 15-20 per cent. The company has 17,000 agents and is adding roughly 2,000-2,500 agents every quarter. Gandhi expects the agency channel's contribution to rise to around 25 per cent over the next five years, with the direct channel accounting for about 5 per cent of business this year. The insurer has extended its distribution tie-up with Union Bank of India until November this year after it ended in March.
As reported by The Economic Times, the insurer is stepping up the use of AI across multiple functions including underwriting, sales, customer service, training, recruitment, calling and email automation. While immediate benefits are expected in customer service, the larger long-term gains are expected to come from improved sales productivity. The company has selected Salesforce's Agentforce to advance its enterprise-wide AI transformation, embedding trusted AI agents into critical processes to improve sales, streamline operations and enhance customer experience. The overall IT budget increased but remained within 5% of operating expenses, with spending rising on agentic AI and cybersecurity.
According to The Economic Times, the insurer is shifting significant operational work from outsourcing to insourcing, expected to generate savings partly by eliminating GST costs on vendor services. The company is setting up a centre of excellence in Jaipur, which is expected to go live in the next one to two months. First-quarter business growth was tepid with the company posting low-single-digit growth, with Gandhi noting that excluding the impact of Union Bank of India, IndiaFirst Life would have grown by about 30%. IT-related operational expenditure currently accounts for about 5 per cent of total operational expenditure.
