Reliance General Insurance, the insurance arm of Reliance Capital, has written to the administrator of the parent company seeking ₹600 crore as capital on an “urgent basis” in order to preserve the business.

Reliance General said as a “large format insurer” it can gain significantly from the growth opportunities in the current ecosystem, like its peers, but for that it needs adequate capital support. The capital infusion is needed to “preserve the business, enhance the value and take our solvency from about 155 per cent to about 175 per cent,” it said in the letter accessed by businessline.

‘Help outperform’

Currently, the borderline solvency of the insurer is creating “business hesitation” in corporate clients, government business lenders and key retail and bancassurance partnerships — something which is being capitalised upon by competitors, it said. “We also feel that this capital infusion will allow us to outperform market growth rate once again, help augment the value creation and negate the risk of underperforming the broader markets.”

The incremental funds will also help improve IRDAI’s comfort level and reflect the group’s continued support towards the subsidiary, the letter signed by company CEO Rakesh Jain said.

It also requested the Reliance Capital administrator Nageshwara Rao Y, on behalf of Reliance General’s over 7,000 employees and 70 lakh customers, to raise the issue with the committee of creditors (CoC) on an “urgent basis”. Reliance Capital is undergoing insolvency proceedings, wherein the CoC is currently evaluating binding bids submitted by prospective investors.

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