LIC targets 4.35 cr policies, Rs 57k cr premium in FY 09

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Mumbai, May 15: The state-run life insurer, Life Insurance Corporation of India (LIC) once again plans to give thrust to its traditional business rather than the unit linked business in FY09 and has projected a target of Rs 57,000 crore from new business premium alone during the current fiscal.

“We have trying to put more thrust on traditional business for some time as we believe covering risk should be the main task of an insurance policy . But the customers have shown overwhelming preference for unit-linked business,’’ said, DK Mehrotra, managing director, LIC.

The corporation, which has further lost market share in FY08, had registered a total fresh premium income of Rs 43,000 crore which includes a sum of Rs 37,600 crore sourced from the unit linked business and rest from the traditional business during the year.

During the current year the corporation plans to sell 4.35 crore of policies and ULIP composition may come down. “ We are targeting to maintain a ratio of 75:25 for the ULIP and traditional policies so far the ratio was at 80:20,’’ said Mehrotra. LIC is also set to revive its already launched product, Market Plus, which was phased out earlier.

Total premium for the LIC during FY08 was pegged at Rs 141,000 crore, out of which, Rs 43,000 crore came from new business premium, Rs 17600 crore came from pension and rest are from renewals during the year. On social sector front, LIC’s customer base stands at 1.75 crore. The ticket size of the conventional life insurance products for LIC has reduced to Rs 6,000 while for linked business it has grown to Rs 27,000 during the year. The corporation has sold 1.96 crore linked policies and 1.8 crore of non-linked insurance products during last year.

On the growth front LIC recorded a compounded growth was 16.86% from 2000, when the sector opened up. However, the corporation has been able to record 33% on an average for past four years, said Mehrotra. In fact, the LIC has already filed its application before Insurance and Regulatory Development Authority for the same, said Mehrotra.