The Hindu Business Line : LIC books Rs 4,000-cr profit from capital markets

LIFE Insurance Corporation of India has booked a profit of about Rs 4,000 crore as investment income, from the debt and equity market as on January 31, Mr A.K. Shukla, Chairman, told newspersons here on Saturday. The corporation has set a profit target of Rs 5,000 from investments by the end of the current fiscal.

Mr Shukla said LIC had invested Rs 11,000 crore in the equity market during the current fiscal. The market value of LIC's equity portfolio now stands at Rs 84,000 crore against their book value of Rs 38,000 crore, he said.

The Chairman said LIC now ranks among the top 30 life insurers of the world and accounted for 0.7 per cent of the global market pie, up from 0.4 per cent six years ago.

LIC has raked in new business premium of Rs 10,995 crore as on January 31, a growth of 73 per cent from the previous fiscal. The corporation has issued 1.82 crore policies during the corresponding period, a growth of 24 per cent. Its total assets will be Rs 5 lakh crore by the end of March.

Mr Shukla said LIC had filed proposals for new products with the IRDA, but due to shortage of actuaries with the regulator, a large number of products are awaiting approval.

LIC's golden jubilee product Bima Gold has sold more than 20 lakh policies, which is 12 per cent of the corporations' total policy budget. The Chairman said new products usually averaged 6 per cent of the policy budget.

LIC had sold 15,75,627 ULIP policies and earned premium of Rs 5,200 crore. "Following IRDA's recent guideline, only 10 per cent of our agents will sell ULIPs and they will receive special training. We have also instructed our agents that the proportion of business from ULIP and conventional products should be 35:65 against the current 43:57."

The corporation has also begun work on its credit card venture. Mr Shukla said that KPMG will be the corporation's consultant for the venture. An MoU is expected to be signed shortly.

"In the first phase, the consultant will advise us about the feasibility of the business and whether we should form a joint venture or stay stand-alone. In the second phase, the consultant will help us formulate the credit card entity and find a joint venture partner, if we need one," said the Chairman.

LIC's foray into health insurance is now contingent on IRDA's approval.

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