LIC rakes in Rs 3700 cr profit from markets

Life Insurance Corporation of India (LIC) has earned Rs 3,700 crore profit from investment operations, equity and debt markets, till date in current financial year. It expects to make a total gain of Rs 5,000 crore by end of March 2006.

At present, the market value of its equity portfolio is Rs 84,000 crore while book value stood at Rs 38,000 crore. LIC is a net investor in the capital market with a focus on building long-term assets.

The asset base is expected to touch Rs 5,00,000 crore by the end of March 2006, LIC chairman A K Shukla told reporters here on Saturday.

LIC has posted 24 per cent growth in business (new policy) and sold 1.82 crore policies till end of January 2006 in the current financial year. The first premium income grew by 73 per cent at Rs 10,995 crore, Shukla said. He was speaking at inauguration of a week-long exposition as part of LIC golden jubilee year celebrations.

LIC sold 15.75 lakh unit-linked insurance polices (ULIP) and earned premium income of Rs 5,200 crore. Following Irda's guidelines for ULIP, the corporation would share of ULIP premium to other policy premium. At present only 10 per cent of agents hawk ULIP products.

On LIC's plans to foray into health insurance business, he said it may get postponed to next financial year as it (LIC) is waiting for a decision by Irda on some regulatory matters. He, however, did not elaborate on what the regulatory issues were.

The corporation has formed a group chart entry in healthcare insurance segment and would take a decision on roping in foreign partner after Irda finalises its decision.

Though LIC does not have a data and expertise on the health care it is not difficult to find a overseas partner as many players are willing to tie-up with us, he said.

On l micro life insurance product, Shukla said it has already filed a product with the regulator. LIC has sought Irda's permission to allow its zonal offices to tie-up with different non-life insurers to market the product.

An internal team is devising training programme for micro-insurance agents. These agents are expected to undergo 25-hour training against mandatory 100-hour course for regular agents.

The corporation has also formed a group to look into feasibility of having a single window for composite insurance product covering life, non-life, healthcare and crop insurance.

The group would study regulatory and infrastructure aspects and prepare report in six months. Later, LIC would go to the government with proposal, he said.

About the credit card venture, Shukla said LIC will sign a memorandum of understanding with consultancy firm KPMG which would be advise on whether it (LIC) should enter into this business.