Govt may relax LIC's equity exposure cap

Source: Business Standard

The government is set to relax the equity exposure norms for Life Insurance Corporation (LIC), the largest institutional investor in the country, albeit with some riders. A finance ministry official said LIC would be allowed to increase its exposure to more than 10 per cent in corporate entities. At present, LIC can invest up to 10 per cent of capital employed by the investee company, or 10 per cent of the fund size in a corporate entity, whichever is lower. The capital employed includes share capital, free reserves and debentures or bonds.

The caveat, however, is the insurance behemoth would have to prune its book in illiquid stocks and unlisted investments, which constitute around Rs 5,000 crore, or two per cent of its total equity investment corpus.

LIC’s total investment corpus stood at nearly Rs 11 lakh crore as on March 31, 2011, of which 20 per cent, or Rs 2.2 lakh crore, was in equity. During 2010-11, LIC invested Rs 1.96 lakh crore, of which Rs 43,000 crore was invested in equities. In the current financial year, the insurer has plans to invest a similar amount in equities.

To be sure, LIC currently has equity stakes more than 10 per cent in 37 listed companies. Three years ago, the insurance regulator, Irda, proposed bringing down LIC holdings to under 10 per cent in all listed companies. However, it did not follow up on the proposal, given the anaemic state of the markets at that time.

There are around 100 listed companies in which LIC currently holds five to 10 per cent stake. Irda (Insurance Regulatory and

LIC keeps the economy healthy

LIC: The big daddy

Source: Business Today

• LIC is the industry leader, with a 69 per cent market share in 2010/11
• Compared to 2.6 per cent annual growth in fi rst-year premiums for private insurers, LIC recorded growth of nearly 22 per cent in 2010/11
• LIC has the largest sales force of 1.34 million advisors, as of March 2010
• LIC's 13.1 per cent expense ratio (including advisor commission) is lowest in the world
• With total investments of Rs 10.96 trillion, LIC was India's largest institutional investor as of March 2010

"The guarantee does not come free"

As a home loan officer with a private sector bank, Yatindra Pathak says he has often heard people say: "Mere pass ICICI ka hi LIC hai" (I have ICICI's LIC). LIC, or the Life Insurance Corporation of India, is practically synonymous with insurance in the country. And with good reason: despite 22 private entrants into the industry since it was liberalised in 2000, LIC has the lion's share.

At Rs 86,445 crore, it notched up an overwhelming 69 per cent share of first premiums in 2010/11 - nearly 22 per cent more than in the previous year. By contrast, private insurers garnered a cumulative Rs 39,831 crore, which worked out to an annual growth of 2.56 per cent.

The sailing has not been all smooth, though. In 2009/10, 75 per cent of LIC's new business came through unit-linked insurance policies, or ULIPs. But regulators questioned the governance of these products. The Securities Exchange Board of India wanted to

LIC net actuarial surplus up 10% to Rs 22,716 cr in FY11

Source: ZEEBIZ.com

Rs.1,135 Cr. dividend for Govt.'s Rs.5 Cr. investment!

22700% (yes, 22,700%!) return on investment!!

Rs.21,580 Cr. (95% of surplus) distributed 

to policyholders as bonus!

No Doubt!

LIC...8th wonder of the world!

State-owned life insurance giant LIC has recorded a 10 percent jump in net actuarial surplus for the 2010-11 fiscal at Rs 22,716 crore which has helped it declare an additional bonus for seven of its 'with-profit plans.'

 

Life Insurance Corporation will be paying a bonus of Rs 21,580 crore to the policyholders, up from last fiscal's Rs 19,557 crore, while Rs 1,135 crore has been allocated as government's share against Rs 1,029 crore the year before, its Executive Director (Corporate Communications) Vipin Anand told reporters here.

 

It has increased the bonus component for seven 'with profit plans' like

Private insurers see drop in market share

Source: Money Guru

The surge was primarily driven by 62.3 per cent year-on-year growth in premium collections by LIC.

After continuous decline in premium inflows, the annual premium equivalent of the life insurance industry grew 10.6 per cent in July 2011 and surged 50.6 per cent on a sequential basis. The surge was primarily driven by 62.3 per cent year-on-year growth in premium collections by Life Insurance Corporation of India (LIC) whereas private sector players reported a decline of 37.6 per cent in premium collections in July. 

"On a year-till-date basis (April-July 2011), the APE of the industry declined 14 per cent year on year with the private players reporting a decline of 38.8% in collections for the same period. The market share of private players declined sequentially to 29.1 per cent from 51.7 per cent in July 2010. Among private players, Max New York Life Insurance’s market share increased to 7.7 per cent from 5.0 per cent in July 2010 while HDFC Life’s market share expanded to 14.6% compared with 11.3% as on July 2010," brokerage Sharekhan said in a report. Among private players, Reliance Life Insurance witnessed an APE contraction of 65.5 per cent YoY followed by

LIC market share up at 72.4% in July

Source: Hindustan Times

Life Insurance Corporation (LIC), India's largest life insurance player, has tightened its grip in life insurance sector by increasing its market share in first premium income to 72.4% at the end of July 2011 from 68.7% at the end of March 2011. The insurer also increased it market share in number of policies sold to 78.4% at the end of July 2011, from 76.9% at the end of March 2011.

"Our diversified product portfolio and strong field force of agents who have strong relationship with the policyholders are the major drivers of growth,” said S Roy Chowdhury, executive director (marketing), LIC.

It has 53 products in its portfolio, has sold around 80 lakh policies till the end of July. LIC has set the target of Rs 54,000 crore as a first premium income for 2011-12. During 2010-11, the insurer sold around 3.7 crore individual policies and covered more than 3.5 crore lives through its group schemes, said Chowdhury

PFRDA plans to rope in LIC agents to sell NPS Lite

Source: Economic Times

The interim pension regulator is looking to rope in the 1.4-million strong army of Life Insurance Corporation agents to sell the low-cost variant of its flagship retirement plan, the New Pension Scheme, or NPS. 

The NPS Lite is an NPS carve-up for the poor that has failed to attract many investors so far. The Lite version works on a 'group' model and, therefore, needs aggregators to bring individual subscribers together. Interim regulator Pension Fund Regulatory Development Authority, or PFRDA, oversees the NPS but needs the Insurance Regulatory Authority of India's permission to engage the services of LIC agents. 

"The modalities of roping in LIC are being worked out. It has around

LIC first premium income to grow by 12.5% in FY-12

Source: Economic Times

Country's largest insurer LIC today said it expects 12.5 per cent growth in new business income during 2011-12.

Last fiscal, the Corporation collected first premium income of Rs 48,000 crore while the target is Rs 54,000 crore in FY'12, LIC Senior Divisional Manager R K Jha said here.

While the market share of LIC in terms of first premium income was 72.4 per cent, for the number of policies sold, it was 78.4 per cent at the end of July this year, he said.

The asset under management ( AUM) of the insurer stood at 13.17 lakh crore at the end of March 2011.