If a socially-oriented sector like Insurance is opened up for the public to invest, it is bound to be a disaster, because its embedded value is very volatile and fluctuates with every external event.
Can anyone predict with reasonable accuracy about when or where a natural calamity will strike? How many lives will it claim? How many will be disabled? How much insurance claims' payout will be done by the Corporation?
The recent global Corona Virus - COVID 19 pandemic is a case in point.
Besides, mortality itself is variable. Actuarial estimates may also vary or be off the mark.
Most important - Why should anyone seek to make money or profit from such a noble initiative as providing insurance cover?
Beats us!
It makes us think that announcing L.I.C's I.P.O was a big mistake, after all. How will the Corporation bear this loss of face, after being touted for decades, as the largest profit-making public sector enterprise in India?
Now its very credibility is at stake.
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