When it comes to insurance, there’s no unseating the Life Insurance Corporation (LIC) of India from the top. Or so the behemoth has proved, yet again.
At the end of June, LIC’s market share, based on first premium income, stood at an awe-inspiring 73.43%.
That’s a gain of nearly 13% from the career low of 60.79% the state-owned company had seen at the end of March, 2009, having consistently bled market share to private insurers.
TS Vijayan, chairman and managing director of LIC, attributes the growth to his 15 lakh strong army of agents, each of whom garners an average of 37 policies and who together account for nearly 95% of the company’s business. This army is expected to grow by 20% this year, which means an addition of 3 lakh agents, said Vijayan.
A major jump in the insurer’s market share came in the quarter ended March when the company collected a premium of Rs 18,740.41 crore, selling 72.26% of the total policies issued by the industry.
“Up to July, 75% of the business came from Ulips,” Vijayan said, adding that 86% of the policies sold were from the traditional products basket.
In the June quarter, the firm parked Rs 10,000 crore in equity markets out of its total investment of Rs 39,000 crore.
Vijayan attributes the company’s success to its “proven track record in prompt settlement of claims and efficient servicing.” The insurer paid Rs 46,921.22 crore as claims in 2009-10 to 205,17,870 policyholders, whose policies matured. Claims raised on account of death were lower at Rs 7,033.89 crore, given to nominees of 664,619 policyholders.
Inspite of such huge claims, LIC generated surplus income, meaning profits from running the business, of Rs 23,478 crore in last fiscal. Over Rs 1,000 crore of this was paid to the central government as dividend, apart from paying a hefty income tax amounting to 12.7%.
Thus LIC contributed approximately Rs.4,500 crore to government coffers during last fiscal.
(Published: Saturday, Aug 7, 2010, 3:00 IST By Khyati Dharamsi | Place: Mumbai | Agency: DNA)