Life Insurance Corporation of India will further strengthen its financial position and is all set to rebound with a 20 per cent growth in premium income to over Rs 11,600 crore (Rs 116 billion) this fiscal.
In an interview to PTI, LIC chairman S B Mathur also exuded confidence of retaining more than 90 per cent market share after five years despite the stiff competition from private players.
"This fiscal, we are expecting a 20 per cent growth in premium income at over Rs 11,600 crore, which is an addition of Rs 2,000 crore (Rs 20 billion) over the previous fiscal's income," he said.
This fiscal, LIC has already mopped up about Rs 1,100 crore (Rs 11 billion) from Varishtha Pension Bima Yojana, which was launched by Prime Minister Atal Bihari Vajpayee a month ago. It targets about Rs 2,000 crore alone from this scheme.
LIC will also push up sales of some of its attractive schemes like Bima Plus and launch more schemes to shore up the premium income.
The state-owned life insurer's premium income dipped by over 14 per cent last fiscal to Rs 9,689 crore (Rs 96.89 billion) on account of lower mop up in its single premium, pension and Jeevan Shree schemes, Mathur said. LIC's premium income was about Rs 14,700 crore (Rs 147 billion) in 2001-02.
The collection from single premium policies dropped to a mere Rs 3,000 crore (Rs 30 billion) last fiscal compared to Rs 5,360 crore (Rs 53.60 billion) in 2001-02, while premium from pension schemes came down to Rs 320 crore (Rs 3.20 billion) from Rs 2,560 crore (Rs 25.60 billion).
LIC also witnessed a Rs 1,800 crore (Rs 18 billion) drop in premium income after it closed its most popular high-yielding policy Jeevan Shree and launched a new policy.
Mathur said LIC was reducing the return on most of its schemes to make it more realistic and phase out the guaranteed schemes gradually.
"We are strengthening our future financial position. We will not launch any new guaranteed scheme. If at all we launch such schemes, it will have a low return and for a maximum five years," he said.
LIC is likely to come up with more social schemes depending on the requirements of the masses, he said.
Moreover, Mathur said LIC has outstanding claims of only 0.22 per cent after settling over 95 lakh (9.5 million) claims worth over Rs 20,000 crore (Rs 200 billion).
With these initiatives, the LIC chief said the insurer would continue to retain more than 90 per cent market share over the next five years.
This is despite the competition from 12 private players backed by strong foreign partners.
The Indian insurance sector is now dotted with all the big names in domestic and foreign financial sector -- ICICI Prudential, HDFC Standard Life, Birla Sunlife, Tata AIG, Allianz Bajaj, Max New York Life, SBI Life, ING Vysya, OM Kotak, Aviva, Metlife and AMP Sanmar.
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