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| LIC's premium income to grow 25% this year |
| BS Reporter / Kolkata Jun 24, 2009, 00:45 IST |
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At a time when the life insurance market is contracting, Life Insurance Corporation of India (LIC), the country’s largest insurer, today said that it was expecting a 25 per cent increase in premium income from the sale of new policies this year.
Overall, the company expected its premium income - which included those from renewal - to rise by 20 per cent over last year’s level of Rs 1,55,000 crore to around Rs 1,86,000 crore. Of this around Rs 65,000 crore would come from new policies.
During the last financial year, when unit-linked insurance plans (Ulips) went out of vogue, LIC’s sales had dropped by around 10 per cent. But during the first two months of the current financial year, the public sector player’s new premium income has increased by over 28 per cent to Rs 4,171 crore.
During May, when the life insurance market, measured in terms of first premium income contracted by 5.4 per cent to Rs 5,052 crore, bucked the trend with premium from new policies 10.9 per cent to Rs 3,242 crore, according to the latest data released by the Insurance Regulatory and Development Authority today. The 21 private life insurance companies together saw a 25.1 per cent decrease in first year premium income to Rs 1,811 crore during May 2009.
“We expect about 20 per cent increase in premium income, and 25 per cent rise in new premium income this fiscal this year. The months of April and May had been very good in terms of growth, with premium growth about 25-30 per cent,” LIC Chairman T S Vijayan said on the sidelines of a conference.
Though Ulips had taken a hit in recent months, LIC would balance its portfolio with a mix of traditional covers, he added.
Of the total premium income, around Rs 40,000 crore is expected to be invested in equities during the current financial year. “Last year our total equity purchase was close to Rs 40,000 crore. If the going is good, this year also it will be like that, or slightly more,” said Vijayan.
With a present solvency margin of 152 per cent, LIC expects improvement in solvency margins due to relaxation in norms by March 2010.
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