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LIC sells more traditional policies than ULIPs

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Plans to launch four-five products this fiscal

MR A.K. SHUKLA (left), Chairman, LIC, with Mr T.S. Vijayan, Managing Director, at a press conference in Mumbai on Friday. - Paul Noronha
MR A.K. SHUKLA (left), Chairman, LIC, with Mr T.S. Vijayan, Managing Director, at a press conference in Mumbai on Friday. - Paul Noronha

Our Bureau

Mumbai, April 14

The share of unit-linked products in Life Insurance Corporation's new business portfolio has shrunk in the last fiscal.

The ratio of unit-linked and traditional plans has changed to 42:58 in 2005-06 from 65:35 in the previous year.

This would mean that LIC has sold more of conventional policies than ULIPs in 2005-06.

While the unit-linked products' first premium income was Rs 7,631.7 crore, the conventional products raked in Rs 10,453.7 crore.

Mr A.K. Shukla, Chairman, LIC, said that the Corporation's focus was on providing traditional insurance cover, to which 90 per cent of its agents are dedicated.

The Corporation's golden jubilee product - Bima Gold, a money-back plan with a lower sum-assured, contributed to 31 per cent of new policies, and also helped in increasing the ratio of traditional products.

Equity investments

LIC made a gross investment of Rs 14,867 crore in the equity market, up from the previous year's Rs 10,000 crore. Investment in the debt market was around Rs 45,000 crore.

LIC had invested Rs 12,000 crore in infrastructure in the last fiscal. "In the current fiscal, we hope to make long-term investments in five mega power projects," he said.

For fiscal 2005-06, LIC's first premium income grew 48.6 per cent, to Rs 18,085 crore, up from Rs 12,174 crore in 2004-05.

Record sale

It sold 3.15 crore policies in 2005-06, making for an all-time high growth of 31.7 per cent in new policies. 1.7 crore polices were sold in March alone, said Mr Shukla

LIC's pension and group schemes contributed Rs 3,911 crore, a growth of 7 per cent in terms of premium - despite FBT on superannuation. Alternative channels, including bancassurance, brought in premium of Rs 352 crore.

New products

LIC plans four or five new products in the current fiscal, and 50-60 more satellite offices this fiscal, in addition to the existing 25.

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(This article was published in the Business Line print edition dated April 15, 2006)
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