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LIC expects a good growth in business during the current fiscal, backed by increasing awareness for the need for insurance among customers and a strong digital push.
According to Raj Kumar, Managing Director, LIC of India, as on August 31, 2020, the insurer is at par with last years’ levels in terms of new business premiums and has witnessed close to 13 per cent growth in renewal premiums.
“As on August 31 we are at last years’ level and from here on it could be a take-off (in terms of growth),” Kumar said at a webinar organised by the Merchants’ Chamber of Commerce and Industry here on Wednesday.
Ath the end of August, its renewal premium stood at around ₹87,327 crore as against ₹77,176 crore during the same period last year, a growth of around 13 per cent. Kumar attributed the growth in renewal premium to the strong digital push adopted by the company.
Though the persistency has been impacted in the short term given that people are holding back cash due to financial constraints, it is expected to improve moving forward.
Covid-19 trends
Talking about the impact of the Covid-19 pandemic on the insurance industry, he said that while it was expected that there would be a rise in policies being surrendered, that has not been the case. In fact, the surrender of policies is down by nearly 35 per cent on a year-on-year basis — a “healthy trend” which indicates that people would like to hold on to their insurance policies.
A majority of the premium flows were from big-ticket policies while collection from small-ticket customers had suffered in the wake of the pandemic.
“It was also felt that death claims may go for a toss. But we have received only 911 claims so far out of Covid,” he said.
LIC has witnessed close to 20 per cent growth in investment income and has booked profit to the tune of ₹13,000 crore from stock market operations till the end of August this year. The insurer had net investment of around ₹28,000 crore in the stock market, he added.
When asked about the proposed IPO, he said the government has intentions to complete it by March 2021 and the insurer would abide by the instructions as and when they follow.