The Hindu Business Line : LIC `group cover' business up 9 pc despite FBT

THE group insurance business of LIC rose nine per cent up to November 15, despite fears of a slowdown in demand for group superannuation policies from corporates after the introduction of fringe benefit tax.

Life Insurance Corporation expects the premium income to exceed its target of Rs 3,600 crore, which was kept marginally lower than last year's sales of Rs 3,666 crore.

Mr R. Venugopal, Executive Director, Pension and Group, LIC said though the fringe benefit tax had impacted the group business growth, many corporate renewals took place in the last quarter. LIC also plans to launch a unit-linked group gratuity product in January. The fringe benefit tax had cast a serious doubt on the future prospects of the group superannuation business since pension falls under the category of corporate spends.

However, LIC's group business has raked in a premium of Rs 1,584 crore as on November 15, up by nine per cent from Rs 1,454 core in the same period last year.

The company has covered 28 lakh lives during the period. Group gratuity at Rs 636 crore brought in the bulk of the premium during this period followed by group superannuation and group life schemes at Rs 378 crore and Rs 184 crore respectively. The rest of the premium was contributed by other policies such as leave encashment and mortgage redemption. The south zone brought in the maximum premium at Rs 400 crore and covered 3 lakh lives during the period, Mr Venugopal said.

In the last fiscal, the pension and group business had contributed Rs 3,666 crore to the kitty. This accounted for 17 per cent of LIC's total business. LIC has also made significant progress with respect to group life insurance under its social security schemes.

Mr Venugopal said that 45-lakh tendu leaf pluckers in Madhya Pradesh were covered up to November under the Janashree Bima Yojana social security scheme. With the new micro-insurance regulation on the anvil, the focus would be on more tie-ups with NGOs and micro-finance institutions to increase coverage in this segment.

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