LIC seeks to pack greater funds punch

FOCUS ON CORE

Calcutta, March 7: The Life Insurance Corporation of India (LIC) plans to invest 20 per cent more in 2010-11.

“Our total investment in the current financial year would be Rs 2,00,000 crore and in the next fiscal it would be 20 per cent more taking into consideration reinvestment of income from past investments,” LIC chairman T.S. Vijayan said on the sidelines of a stone-laying function of a housing complex for its policyholders here today.

India’s No. 1 insurer will invest nearly Rs 36,000 crore in infrastructure in 2010-11. “Infrastructure accounts for 15 per cent of our total investment,” Vijayan said.

According to Vijayan, the LIC is a big lender to Indian Railway Finance Corporation Limited, with 27 per cent of its assets financed by the insurer through debt.

The LIC also expects an 18-19 per cent growth in total premium income in 2010-11 over Rs 1,76,000 crore targeted for this fiscal.

Till January-end of this fiscal, the LIC’s premium income from new businesses has grown 22.98 per cent to Rs 49,019.49 crore compared with the same period a year ago.

The market share of the state-owned insurer has grown to 65.06 per cent. Its market share had dipped to 55 per cent in October 2008.

The LIC’s new business premium income, however, declined 53.45 per cent to Rs 4,841,42 crore in January 2010 against the same period last year. In January 2009, the LIC had new premium income of Rs 10,401.13 crore, according to the Insurance Regulatory and Development Authority.

However, the industry as a whole saw a decline in new premium income in January. It fell to Rs 7,789.71 crore against Rs 13,043.72 crore in the year-ago period.

Though the insurer’s average premium ticket size is the smallest (Rs 6,873.21), it manages 86 per cent of the total assets (Rs 9,31,000 crore) of the life insurance industry.

“This year, we have given a dividend of Rs 929 crore to the government,” Vijayan said.

He also said the company expected an income of Rs 200-300 crore from its real estate foray this year.