Canara HSBC Life Insurance Company
- Canara HSBC Life Insurance is coming out with a 100% book building; initial public offering (IPO) of 23,75,00,000 shares of 10 each in a price band Rs 100-106 per equity share.
- Not more than 50% of the issue will be allocated to Qualified Institutional Buyers (QIBs), including 5% to the mutual funds. Further, not less than 15% of the issue will be available for the non-institutional bidders and the remaining 35% for the retail investors.
- The issue will open for subscription on October 10, 2025 and will close on October 14, 2025.
- The shares will be listed on BSE as well as NSE.
- The face value of the share is Rs 10 and is priced 10.00 times of its face value on the lower side and 10.60 times on the higher side.
- Book running lead managers to the issue are SBI Capital Markets, BNP Paribas, HSBC Securities and Capital Markets (India), JM Financial and Motilal Oswal Investment Advisors.
- Compliance Officer for the issue is Vatsala Sameer.
Profile of the company
Canara HSBC Life Insurance Company is a private life insurer in India and promoted by Canara Bank (which ranks as the fourth largest public sector bank by total assets in India as at March 31, 2025). Its individual weighted premium income collected by the company grew third highest amongst bank led insurers between Fiscal 2022 and 2025 and was the second highest year-on-year growth amongst its Peer Set for Fiscal 2025. The company had the third highest assets under management (AUM) amongst public sector bank promoted led life insurers, as at March 31, 2025.
The company actively engages with customers through digital channels, such as its website and mobile app, complemented by strategic alliances with brokers and corporate agents that enhance customer choices and extend its reach across India. Additionally, it has established a direct sales model, supported by a dedicated field force, ensuring personalized service and customer engagement. Furthermore, through its defense channel, it focuses on armed forces personnel and their families, offering tailored insurance products designed to meet their unique needs. This segment is crucial for providing financial security to those serving in the armed forces. Its strategic approach ensures that it reaches a wide audience, enhance financial inclusion and remain responsive to dynamic market needs.
It offers a comprehensive range of life insurance products tailored for both individual and group (i.e., companies, businesses or organizations) customers. Its offerings primarily include saving and endowment plans, term (pure protection) plans, retirement solutions, group credit life and protection plans and the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY). The company’s product portfolio comprises 20 individual products, seven group products and two optional rider benefits, along with policies under the PMJJBY scheme. Its products have comprehensive protection, guaranteed income and market-linked growth features. It also delivers options like multiple payout choices, investment management flexibility and the ability to customize through a breadth of plan and fund offerings, including limited pay annuity plans and over ten fund choices in unit-linked products.
Proceed is being used for:
- Carrying out the Offer for Sale of Equity Shares of face value of Rs 10 each by the Selling Shareholders
- Achieving the benefits of listing the Equity Shares on the Stock Exchanges
Industry Overview
Insurance sector in India plays a dynamic role in the wellbeing of its economy. It substantially increases the opportunities for savings amongst the individuals, safeguards their future and helps the insurance sector form a massive pool of funds. The insurance market in India is expected to reach $222 billion by 2026. The Indian Insurance Sector is basically divided into two categories - Life Insurance and Non-life Insurance. The Non-life Insurance sector is also termed as General Insurance. Both the Life Insurance and the Non-life Insurance are governed by the IRDAI. The first-year premium or new business premium of life insurers increased 5.13% to Rs 397336.74 crore the financial year ended March 31, 2025 (FY25), compared with Rs 377960.34 crore in the previous financial year driven by supportive regulations, rising Insurtech adoption and accelerating digitalisation. In two months of FY26 (April- May) first-year premium stood at Rs 52427.4 crore. In FY25, the highest growth was in the Group Yearly Renewable Premium at 35.30% at Rs 15317.79 crore as compared to Rs 11321.38 crore in FY24. Individual Single Premium increased 13.07% to Rs 51353.52 crore in FY25. Individual Non-Single Premium were at Rs 115237.29 crore during the same period.
In FY25, non-life insurance industry reported 6.20% growth in gross direct premium to Rs 307611.84 crore as compared to Rs 289652.31 crore in FY24, aided by the performance of Standalone Health Insurers. Standalone Health Insurers showed 15.99% growth in gross direct premium to Rs 38413.57 crore in FY25 as compared to Rs 33119.29 crore in FY24. The general insurance business in India has witnessed growth, which has been fuelled by the increased participation of private players, improvement in distribution capabilities and operational efficiencies. The government’s Bima Trinity push is poised to accelerate growth in the non-life insurance sector. Foreign Direct Investment (FDI) in non-life insurance segment stood at Rs 5268.51 crore in FY25.
The Indian insurance industry is likely to grow in coming time as technological advancements, an expanding middle class, and supportive regulatory measures. Further, government has raised the FDI limit in insurance companies from 74% to 100%. Such move is likely to attract more players and will help increase in insurance penetration in coming time. The anticipation for the growth of life insurance in India is due to the growing economic activity in the Indian economy and the policies of the government to promote insurance. However, insurance industry may face some challenges like evolving customer expectations, climate change and geopolitical uncertainties. Increasing life expectancy and a growing elderly population present underwriting risk, while concerns about misselling, delayed claims, and cybersecurity threats are gaining importance. US reciprocal tariff is expected to put pressure on marine and trade risk insurance in the country. The tariffs, part of a broader policy move by the US government to impose duties based on reciprocal trade terms, will raise concerns around supply chain disruptions, rising claims, and a potential squeeze on insurer profitability.
Pros and strengths
Established parentage and a trusted brand amplifying customer attraction: The company was incorporated in 2007 and is promoted by Canara Bank, which holds a 51.00% stake, and HSBC Insurance (Asia-Pacific) Holdings Limited, which holds a 26.00% stake. Canara Bank was the fourth largest public sector bank by total assets in India as at March 31, 2025. The company benefits significantly from the strong and well-established brand equity of Canara Bank and the HSBC group, recognized globally for its comprehensive financial services and reputation. Together, both Canara Bank and HSBC India have contributed a significant portion of its new business premium, accounting for 82.17%, 83.70%, 80.38%, 72.44% and 53.09% of the new business premium during the three months period ended June 30, 2025, June 30, 2024 and Fiscals 2025, 2024 and 2023, respectively.
Multi-channel distribution network with Pan-India presence: The company’s suite of products is accessible to both individual and group customers through a diversified distribution network consisting primarily of (i) bancassurance; (ii) brokers and other corporate agents; and (iii) direct sales (including sales on its digital platforms). The infrastructure and operational expenses are also lower for the company as its distribution partners’ branches are used as distribution centres for its products. In particular, its distribution agreement with Canara Bank provides it access to an aggregate of 117 million of their customers through 9,849 branches across India, as at March 31, 2025. Further, life insurance company’s bancassurance channels enable it to acquire customers at a lower cost as compared to other sourcing channels.
Diversified product portfolio: Diversified and balanced product portfolio is crucial to driving its growth, effectively meeting the diverse demands of individual and group customers. By profiling its individual customers based on lifestyle, occupation, financial demographics and specific needs, it offers a suite of comprehensive products that cater to key life stages: the start of career, marriage, family needs and retirement planning. Currently, the company’s portfolio encompassed 20 individual products, seven group products and two optional rider benefits, along with policies under the PMJJBY scheme, designed to address protection, savings and retirement needs. It also had the third highest share of premium from non-linked non-participating business amongst bank led insurance players in Fiscal 2025. Further, it had the second highest average premium ticket size for individual insurance among public sector bank led life insurers for Fiscal 2025.
Technology integrated business platform: The company has leveraged advanced AI, data and analytics to drive both revenue and service improvements, capitalising on advanced technologies to enhance its business operations. Further, it had the second highest information technology expenses amongst its Peer Set for Fiscal 2025 while focusing to automate processes and reduce cost per transactions. For the three months period ended June 30, 2025, June 30, 2024 and Fiscals 2025, 2024 and 2023, its total expenditure incurred towards information technology expenses were Rs 208.00 million, Rs 213.23 million, Rs 933.79 million, Rs 1,028.20 million and Rs 909.64 million, which represented 1.19%, 1.54%, 1.16%, 1.44% and 1.26%, respectively, of its total revenue from operations in such periods. As a result of digitization efforts, the proportion of service requests received through digital channels increased from 72.32% in Fiscal 2023 to 83.00% in Fiscal 2024, further increasing to 87.08% in Fiscal 2025 and 86.56% in three months period ended June 30, 2025.
Risks and concerns
Solvency ratio decreases in last three fiscal years: The company’s solvency ratio for the three months ended June 30, 2025, June 30, 2024 and Fiscals 2025, 2024 and 2023 was 200.42%, 223.82%, 205.82%, 212.83% and 251.81%, respectively against the regulatory requirement of at least 150.00%. Its solvency ratio has decreased in the last three fiscal years primarily due to an increase in new business volumes and change in product mix. If it does not meet solvency ratio requirements, it may be subject to regulatory actions and could be forced to raise additional capital. It may also need additional capital in the future, and it cannot assure investors that it will be able to obtain such capital on acceptable terms or at all.
Significant portion of new business premium comes from non-participating products: A significant proportion of its new business premium is generated by non-participating products, although participating products continue to contribute to a portion of its revenues. The company has garnered 19.94%, 34.99% and 45.40% of its new business premium from Non-participating savings products in FY25, FY24 and FY23 respectively. Any significant regulatory changes or market developments that adversely affect sales of such products could have a material adverse effect on its business, financial condition, results of operations and cash flows and may also require it to make changes to its existing product designs.
Geographical constrain: A significant portion of its new business premium from individual products in India is concentrated in certain states. The company has garnered over 61% of total New Business Premium from individual products in FY25 collectively from few states namely Karnataka, Maharashtra, Kerala, Uttar Pradesh and Tamil Nadu. Any significant reduction in new business premiums of individual products from any of these states could have a material adverse effect on its business, financial condition, results of operations and cash flow.
Stiff competition: The company faces significant competition in India with respect of its life insurance and pension business. Its ability to compete is based on a number of factors, including premiums charged and other terms and conditions of coverage, product features, investment performance, services provided, product development, distribution capabilities, scale, experience, commission structure, brand strength and name recognition, information technology and actual or perceived financial strength. It faces competition in the Indian life insurance market from both public and private sector competitors and it competes principally with other large life insurance companies in India.
Outlook
Canara HSBC Life Insurance Company is a private life insurance company in India, jointly promoted by Canara Bank and HSBC Insurance (Asia-Pacific) Holdings. The company offers a portfolio comprising 20 individual products, 7 group products, and 2 optional riders, along with policies under the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY). The company has technology integrated business platform with strong focus on automation and digital analytics. On the concern side, a significant proportion of the company’s new business premium is generated by non-participating products, although participating products continue to contribute to a portion of its revenues. Any significant regulatory changes or market developments that adversely affect sales of such products could have a material adverse effect on its business, financial condition, results of operations and cash flows and may also require it to make changes to its existing product designs.
The issue has been offering 23,75,00,000 shares in a price band of Rs 100-106 per equity share. The aggregate size of the offer is around Rs 2375.00 crore to Rs 2517.50 crore based on lower and upper price band respectively. Minimum application is to be made for 140 shares and in multiples thereon, thereafter. On performance front, premiums earned - net increased by 13.24% from Rs 69,326.39 million in Fiscal 2024 to Rs 78,502.41 million in Fiscal 2025, primarily due to an increase in first year premiums and renewal premiums which was partially offset by a decrease in single premiums. Moreover, the company’s profit after tax increased marginally by 3.23% to Rs 1,169.81 million in Fiscal 2025 as compared to Rs 1,133.17 million in Fiscal 2024.
In a bid to increase life insurance penetration within the existing bancassurance channel, the company is adopting a strategy to maximize the synergies between the bancassurance partners and the company while addressing both customer needs and ease of onboarding. It plans to extend its reach by deepening its presence within the bancassurance networks, particularly leveraging Canara Bank's network. It will further utilize its bancassurance partners wide branch network and customer base, segmenting customers based on demographics, income and life stages. With detailed analysis using analytics, it aims to offer tailored life insurance products for these segments. This approach will help it in not only identifying customers based on their financial position but also to understand their insurance needs. Its diverse product range will meet their needs covering home loan protection, savings, individual protection, group protection, and retirement solutions.
