Insurance and insurtech companies across the globe raised $2.86 billion from initial public offerings in the first six months of 2022, most of which came from Life Insurance Corp. of India's listing, according to an S&P Global Market Intelligence analysis.

Activity in the first half of 2022 was slower than the same period a year ago, when insurance and insurtech companies raised an aggregate of $4.05 billion from IPOs. Of the $2.86 billion raised from the IPOs during the period, $2.66 billion came from LIC's listing.

IPO market sees slowdown

Overall activity seems to have slowed sharply as there were just five insurance sector IPOs worldwide in the first half of 2022. By comparison, the industry recorded 29 IPOs in 2021 and 22 in 2020, despite the COVID-19 pandemic.

The downward trend is in line with that of the broader IPO market. Momentum dramatically slowed in 2022 as many IPOs across all economic sectors had to be postponed due to heightened volatility, declining valuation and poor post-IPO share price performance, according to Ernst & Young.

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LIC's IPO

The Indian insurer's IPO was much anticipated, as it was geared to be the largest-ever public listing in the country, but the insurer hit the market at a price lower than initially expected.

The Indian government opted to push through with the listing despite "rocky" market conditions caused by inflation and global recession fears as well as the impact of Russia's invasion of Ukraine, according to The Wall Street Journal. LIC had an oversubscribed offering, but shares ended 7.8% lower than the IPO price of 949 rupees right after going public.

Despite the poor initial performance, Motilal Oswal Securities Ltd. analyst Nitin Kumar Aggarwal had an upbeat view of LIC, initiating the insurer at "buy." The analyst said LIC's valuation seems "reasonable" given "gradual margin recovery and diversification in business mix." High sensitivity to equity market volatility is still a headwind, Aggarwal wrote in a July 4 research note.

Emkay Global Financial Services Ltd. analyst Avinash Singh, who initiated LIC at "hold" following the IPO, also noted the insurer's sensitivity to changes in the equity market and interest rates.

Another notable IPO in the second quarter was that of Cayman Islands-based Financials Acquisition Corp., a special purpose acquisition company focused on insurance or the financial services industry. The offering raised an aggregate of $195.9 million.