EXPANDING REACH

Mumbai, April 13: Life Insurance Corporation of India (LIC) is scouting for business opportunities in overseas markets.

After establishing a venture in Sri Lanka, the big daddy of India’s insurance industry plans to start operations in Southeast Asia, Australia, New Zealand and the US.

Sources told The Telegraph that the company would venture into the Singapore market before making tentative moves in the West.

The company expects to receive required approvals from the Insurance and Regulatory Development Authority and the Singapore authorities soon.

“Singapore is an obvious favourite among international markets because of its proximity to India and Sri Lanka. We have already filed applications with the IRDA and the Singapore government and hope to receive approvals shortly. We plan to set up a representative office in Singapore to start our operations. We should be able to finalise the project within three to four months,” said an LIC official.

“We are primarily aiming to provide cover to the large population of non-resident Indians in Singapore. Moreover, there are a number of Indian banks with branches and offices in Singapore and have tieups and joint ventures. They can help us distribute our products to their customers there,” the official added.

In 2007-08, LIC created a separate entity to handle health insurance and also entered into a three-way joint venture with GE Money and Corporation Bank to launch credit cards, enabling its customers to pay premiums electronically.

The public sector insurer is planning to go global at a time when private sector insurance companies are expanding their domestic operations through tieups with foreign insurance firms.

LIC’s fund stands at over Rs 4,65,000 crore with assets valued at more than Rs 5,50,000 crore.

“It is not easy for an Indian insurance company to establish itself in the West, especially the US, where each state has different compliance norms. The competition becomes even tougher with the presence of so many other international players, who have already gained visibility and customers’ faith over the years,” said LIC managing director D.K. Mehrotra.

During 2006-07, LIC collected premiums of about Rs 31,556.80 crore from unit-linked insurance products alone, which accounted for around 79.8 per cent of the total new business premium generated during the fiscal.

The premium data for 2007-08 is yet to be collated.

Mehrotra said the year had seen an unexpected paradigm shift in customers’ preferences towards traditional life policies once again.