LIC to invest Rs 2 lakh cr in 2010-11

Life Insurance Corporation of India (LIC) is looking to invest up to Rs 2 lakh crore in various asset classes, including equity and debt markets, during the current financial year.

The insurer has invested Rs 8,363 crore in equity markets in the first two months of the financial year.

“We will invest up to Rs 2 lakh crore in all asset classes in 2010-11. Last year, we invested Rs 1.91 lakh crore across sectors,” said Mohan Raj, executive director, investment-operations, on the sidelines of an event to announce a partnership between LIC and the Unique Identification Authority of India.

LIC is targeting at bringing down its dependence on unit-linked insurance plans (Ulips) from 65 per cent last year to 60 per cent this year.

“Our investment in equity will depend on Ulip sales. We are looking at a 60:40 mix this year,” he said. He added that the investment pattern would depend on collections under Ulips. “We may look at investing in new asset classes,” he said.

Despite the dispute over regulation of Ulips between the Insurance Regulatory & Development Authority (Irda) and the Securities & Exchange Board of India (Sebi), LIC saw a robust 97 per cent growth in new premium income during the first two months of the financial year. This was mainly due to Wealth Plus, which contributed over Rs 10,600 crore. It has collected the highest premium for the insurer after Jeevan Aastha, which had collected close to Rs 10,000 crore last year.

LIC is expecting around 20-25 per cent growth in new business income.