LIC Q1 premium income up 53% to Rs 821 crore

The Life Insurance Corporation of India (LIC) has seen a shift in product sales towards unit-linked plans in the first quarter of fiscal 2005.

The state life insurer saw a growth of 52.77 per cent in new premium income to Rs 821.27 crore, with the number of policies sold going up by over 27 per cent to 25.06 lakh as on 15 June.

This was largely on account of the sale of single premium plans, which mopped up a premium income of Rs 169.81 crore, reflecting a growth rate of almost 500 per cent. This is despite the amendments in section 10 (10D) and section 88 of the Income Tax Act.

LIC has set itself a target of achieving a 35 per cent growth in first premium income for 2004-05 at Rs 11,565 crore, against Rs 8,566.87 crore achieved in fiscal 2004, its chairman S B Mathur said. The corporation aims to sell 3,10,00,000 crore new policies this year.

"We have seen a shift in product mix as 14 per cent of our total sales are on account of our unit-linked plan Bima Plus," said Mathur.

The corporation proposes to introduce two more unit-linked plans during the year "" endowment unit-linked which will offer greater flexibility as the term will not be fixed, and a pension unit-linked plan.

On individual pension plans, there has been a negative growth in premium income at 67.89 per cent, with just Rs 17.96 crore mopped up. However, group pension sales surged by 100 per cent to Rs 773.47 crore with an addition of 2.47 lakh new lives.

The government sponsored Varishtha Pension Bima Yojana has also fared well with 41,710 policies sold during the first two and a half months of the fiscal, and having mopped up Rs 807.89 crore.