LIC's total investments touch Rs 14.8-lakh crore

Source: Business Standard

India's largest insurer to invest Rs 2.25-lakh crore in FY14

 

The total investments of Life Insurance Corporation of India (LIC) at the end of FY13 stood at Rs 14.86 lakh crore. According to LIC's annual report for 2012-13, the country's largest insurer had Rs 14.84 lakh crore worth of investments in India and Rs 2,408.61 crore worth of investments abroad.

In FY14, LIC plans to invest Rs 2.25 lakh crore in government securities, bonds, infrastructure, debenture and equity, of which 15-20 per cent would be in equity.

The insurer had booked Rs 21,000 crore profit from sale of equities and churning of the  portfolio. According to an earlier presentation by LIC to a Parliament standing committee on finance, total investments at the end of March 31, 2012 was Rs 13.49 lakh crore.

Usha Sangwan, managing director of LIC, had recently said the insurer has planned to invest Rs 40,000 crore in equity this financial year. "We have already invested Rs 33,000 crore. We have also booked profits of Rs 14,000 crore, since there has been a continuous churn in the portfolio," she had said.

With respect to the investment in infrastructure and the social sector, LIC invested Rs 10,995.33 crore in power, Rs 4,121.74 crore in housing, Rs 35.72 crore in water supply and sewerage, and Rs 5,012.13 crore in other infrastructure in FY13.

The insurer plans to have 12 per cent growth in new business premium this financial year. LIC Chairman S K Roy had earlier said that although it had budgeted for 12 per cent in first premium growth, the insurer is hopeful of achieving more growth.

LIC most consumer friendly: IRDA

Source: The Times of India
Life Insurance Corporation of India has outdone its peers in the private sector in most parameters used for measuring consumer friendliness. The corporation had fewer lapses, higher claim settlement and no penalties from the regulator.

The claim settlement ratio of LIC was better than that of private life insurers. Its settlement ratio increased to 97.73% in FY13 from 97.42% in the previous year. And the percentage of rejections was only 1.12% compared to 1.30% earlier.

Private insurers reported a dip in settlement ratio to 88.65% from 89.34% in FY12. "Private insurers had repudiated more number of claims when compared to LIC. The percentage of repudiations (by private insurers) was 7.85%, almost unchanged from pervious years 7.82% in FY12," the Insurance Regulatory and Development Authority said in its annual report for FY13 released on Wednesday.

In terms of persistency of business too, LIC scores better with a lapse ratio of only 5.6% as against private life companies which are all in double digits ranging from 17% to 42%. The only exception is HDFC Life Insurance, which has a lapse ratio of 5.6%. IRDA measures lapse ratio as the number of policies lapsed during the year divided by the average of the policies in force at the beginning and end of the year.

The 13-month persistency (policies which are renewed after a year) is the highest for PNB Metlife at 71.22% on a much smaller business. LIC, Max Life Insurance and IDBI Federal Life Insurance have a 13-month persistency of 70%. For other private companies, the ratio ranges from a low of 36% to 69%.

Private insurers scored slightly better was in terms of commission ratio. Private insurers paid out 5.7% of total premium as commission compared to 7.08% for LIC. However, LIC reach was much bigger and it sold more policies to the lower middle class with an average premium per policy of Rs 11,143. Compared to this, the private life insurers generated an average premium of Rs 24,457 per policy - more than double that of LIC.

While agents of private companies managed to sell only an average of three policies in FY13, the average agent of LIC sold 29 policies. In FY13, the insurance regulatory authority imposed penalties on 12 companies, including two public sector non-life insurers, for various reasons. The penalties ranged from Rs 5 lakh to Rs 1.4 crore. However, LIC did not face any penal action.

In the first quarter of FY14 life, insurers have written business of Rs 19,216 crore as against Rs 19,451 crore, recording a 1.2% shrinkage in business. While private insurers registered a 6.87% decline, the state-owned life insurer recorded a growth of 2.92%. LIC, with Rs 14,295 crore of premium from new policies, saw its new business market share rise from 74.29% to 74.39%.

Private insurance companies deny...