Shukla: Upbeat

Mumbai, Feb 4: Life Insurance Corporation of India (LIC) has renewed its interest for foraying into the credit card business and has appointed KPMG to prepare a roadmap.

“We will sign a memorandum of understanding with KPMG within a week. They will guide us through the various phases of the venture,” LIC chairman A. K. Shukla said here today.

In the first phase, they will assess the viability of the business and also the structure for the same, whether it should be a standalone or a joint venture. Subsequently, they will also help LIC identify the possible joint venture partner, if that model is adopted, Shukla said.

The insurance mammoth has also set up a core group to explore the possibilities in the health insurance segment.

“The Insurance Regulatory and Development of India (IRDA) has issued proposed guidelines for the health insurance business and there are a few regulatory issues to be addressed in the sector. Once the final guidelines are in place, we will finalise our plans,” added Shukla.

“We have formed a special team which is looking into various aspects of the composite micro-insurance business,” said Shukla.

He explained that the consumers in the rural areas prefer a single window solution which offers them life, general, crop and health insurance as a composite product.

“The team will take about six months to work out the modalities of the business model and once a business plan is ready, we will approach IRDA for a formal permission,” said Shukla.

The IRDA has recently allowed life insurers to tie-up with general insurance companies for developing micro-insurance products that can have both life and non-life components in a single policy.

“We have the provision to book one per cent of our controlled fund as profit,” said Shukla. As on March 2006, the total assets of LIC would be Rs 5 lakh crore. Thus, it will earn Rs 5,000 crore as income from investment for the current fiscal.

“We have already booked profits of Rs 3,700 crore,” he said.

The market value of LIC’s investment in the capital market is Rs 84,000 crore, the book value of which is Rs 38,000 crore.