The Hindu Business Line : LIC's group biz new premiums at Rs 5,900 cr

STRATEGIC TIE-UP: Mr P.L. Gairola (right), CMD, Dena Bank, and Mr T.S. Vijayan, Chairman, LIC, at a press conference in Mumbai on Wednesday. - Shashi Ashiwal

Mumbai , Jan. 3

Group business of the Life Insurance Corporation of India (LIC) leaped by 180 per cent to touch Rs 5,900 crore in new premium as on December 15, 2006.

Group life insurance business includes superannuation, gratuity and leave encashment schemes of corporates.

In the last fiscal, LIC had achieved Rs 3,900 crore in new business premium.

A senior LIC official said the corporation's market share in the group business had shot up 84 per cent against 78 per cent at the end of last fiscal. The bulk of the business at Rs 3,000 crore this year came from gratuity schemes and Rs 1,000 crore was contributed by superannuation schemes. The fund under management for group insurance is around Rs 53,000 crore.

LIC will soon be launching a unit-linked superannuation scheme and the insurer will be developing a Web-enabled service to enable customers make switches in asset allocation.

Pact with Dena Bank

The PSU insurer, on Wednesday, tied up with Dena Bank to offer a single-premium group mortgage redemption assurance scheme for the bank's housing loan borrowers.

It provides an amount equal to the sum assured in force on the death of the policyholder for liquidating the outstanding debt.

Retail loans constitute over 23 per cent of Dena Bank's total advances and housing loans are a major component of retail loans, said Mr P.L. Gairola, Chairman and Managing Director, Dena Bank.

The bank is likely to announce a hike in its benchmark Prime Lending Rate next week after a board meeting, Mr Gairola said.

LIC has tied up with around 10 banks for group mortgage schemes and has earned around Rs 58 crore in premium on a cumulative basis.

Alternate channels such as bancassurance have brought in Rs 400 crore of new business premium this fiscal.

LIC has raked in new business premium of around Rs 28,000 crore this fiscal. The insurer's market share has increased to 79.65 per cent. The premium growth of LIC stands at 184.50 per cent surpassing the growth of private players at 104.99 per cent.