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Mr S. B. Mathur, Chairman, LIC.

Hyderabad , Dec. 1

DELOITTE Consulting, the global management consultancy major, has advised Life Insurance Corporation of India, to ramp up its long-term strategies by closely linking them with the short- and medium-term plans and to strengthen both asset-liability machinery and risk management system.

Addressing the employees and the field force of the corporation here on Monday, the LIC Chairman, Mr S.B. Mathur, said the Government would have to take a decision on the Deloitte recommendation to corporatise LIC.

LIC had sought the services of Deloitte following the directives from the Ministry of Finance to go in for management audit by an outside firm.

Stating that steps had been initiated in most of the areas even before receiving the recommendations, Mr Mathur said the consultant had expressed satisfaction over the guaranteed products offered by LIC and that "there is no comparison with UTI."

According to Mr Mathur, the corporation had undergone an agni pareeksha following the fall in interest rates that raised apprehensions over its ability to honour the high rate guaranteed policies. The corporation had also dispelled apprehensions on its performance owing to the entry of private sector players with multinational alliances. He, however, admitted a marginal impact on LIC's business owing to falling interest rates and volatile capital markets.

He attributed the problem mostly to the absence of long-term paper availability in the country. The corporation could address the problem to some extent by going in for swapping of its short-term and medium-term paper for the long-term papers from the banks.

Announcing that the measures for re-oriented product portfolio had started yielding positive results, Mr Mathur said the corporation had so far recorded a growth of 13.6 per cent in policies and 28 per cent in first premium during the current fiscal. LIC was targeting a growth of 40 per cent in both these segments and was set to register record growth from the next fiscal.

The corporation is tying up with Corporation Bank to utilise its automated teller machines to accept the premium payments of LIC. LIC has also evolved a strategy wherein it would extract the qualitative contribution from its human resources and not use the employees' creativity on routine jobs.

The R&D and product development teams were on the job of recommending measures to revamp the product portfolio, Mr Mathur said.

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