LIC's FY08 profit up 10%

Public sector insurer Life Insurance Corporation of India (LIC) has generated Rs 16,600-crore valuation surplus, or profit, in 2007-08, a 10 per cent rise over 2006-07 figures, sources familiar with the development said.

A formal announcement is expected soon. Of this, the insurance behemoth will pay 5 per cent, or Rs 830 crore, to the government as dividend and will distribute the balance among its policy-holders as bonus.

In the previous year, the dividend was Rs 760 crore. Private insurers pay 10 per cent of their valuation surplus to shareholders. Though LIC is yet to arrive at a figure regarding the bonus, “It will not be less than last year’s,” a source said.

In 2006-07, LIC had declared a bonus of Rs 70 rupees per Rs 1,000 sum assured. In 2007-08, LIC’s solvency margin has also increased to 152 per cent or Rs 42,250 crore as compared with 150 per cent in the previous financial year.

New business premium stood at around Rs 58,000 crore. LIC is aiming for a 30 per cent increase in its new business premium in 2008-09.