LIC ready with Rs 50,000 cr
Buoyed by a rebounding sentiment in which investors are putting more in insurance and insurance-linked investments, the Life Insurance Corporation of India is targeting a growth of 35 per cent in its new business premium in the current financial year. HT Correspondent reports.india Updated: Jun 24, 2009 22:27 IST
Buoyed by a rebounding sentiment in which investors are putting more in insurance and insurance-linked investments, the Life Insurance Corporation of India (LIC) is targeting a growth of 35 per cent in its new business premium in the current financial year.
It plans to have an investible corpus of Rs 1,75,000 crore for 2009-10 after a shrinkage of 10 per cent in new business premiums in 2008-09 to Rs. 52,954 crore.
Speaking about LIC’s investment plans for 2009-10 at the sidelines of the Life Insurance Round Table, Thomas Mathew T, Managing Director of LIC told reporters, “For 2009-10, LIC will be investing Rs 50,000 crore in equities, Rs 50,000 crore in debt instruments around Rs 65,000 crore in government securities and the remaining in project loans, term
loans, mutual funds and venture capital instruments. “
“We have a mandate from the Insurance Regulatory & Development Authority (IRDA) to invest atleast 50 per cent of the life fund premium in government securities. The life fund will be around Rs 1,22,000 crore this year,” he explained.
Last year (2008-09), LIC has a total investible corpus of Rs 1, 62,000 crore of which Rs 40,800 crore was invested in the stock market, Rs 48,000 crore was invested in corporate debt.
“So far debt is not picking up but we expect it to pick up in the coming months,” said Mathew.
Since April this year, the public sector behemoth has invested Rs 8,000 crore in the stock market, mostly in large cap stocks of the 50-share Nifty index.
Around Rs 7,000 crore were invested in debt instruments in the last two months of 2009-10.
“60 per cent of the new business premium for LIC is Unit Linked Insurance plans while it is 90 per cent for the industry. We are consciously trying to move away from Ulips,” Mathew said.
Speaking about the 10 per cent exposure limit imposed by the Insurance Regulatory and Development Authority of India (IRDA) on investing in the equities and debt instruments of a single company, Mathew said that the industry is in discussions with the IRDA and is hopeful of getting a relaxation.
IRDA has already relaxed the limits for investing in infrastructure instruments from 10 per cent to 25 per cent of funds.