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

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

Govt may relax LIC's equity exposure cap

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 to Invest Rs. 45k Crore in Stock Markets

Source: MedIndia

Life Insurance Corporation (LIC) plans to invest Rs. 45,000 crore of its total investment kitty of Rs. 2.15 lakh crore in the stock markets this year. LIC has already invested Rs. 5000 crore since April. 

DK Mehrotra, acting chairman of India’s biggest insurance company says, “Existing regulations stipulate that 50% of the funds have to be deployed in government securities. That apart, we will invest around Rs. 45,000 crore in equities, slightly more than the Rs. 43,000 crore that we had put in last year.” Mehrotra says LIC booked a profit of close to Rs. 17,000 crore during 2010-11 by selling stocks. The corporation, which invested around Rs. 1,83,000 crore in 2010-11 in other securities earned income to the tune of Rs. 90,000 crore. “We believe the market, after experiencing some volatility, could be stabilising and despite high inflation and rising interest rates, we could add to our portfolio if there is an opportunity,” he observes. 

Mehrotra says premium incomes have been picking up in the last two months. LIC currently has just under a 70% share of the life insurance premium market with private sector players together accounting for the rest. LIC will focus on traditional products that provide assured returns to the policy holders and also commission to the agents. 

New Products !!!

Source: BusinessStandard

In view of the stable market scenario at present and sound economic conditions, LIC (Life Insurance Corporation) has planned to introduce at least four more products in the conventional and non-conventional category.

The insurance giant is planning to introduce a new pension system on pilot basis to encourage people from the unorganised sector to voluntarily save for their retirement. The insurance major will not enter banking business but its subsidiary is in process of obtaining banking license.

Speaking to Business Standard, LIC managing director AK Dasgupta said, “It is the right of every investor to enter the market, it is not going down further. The fundamentals of the market are very strong. Market conditions are very favourable for investors if they want to stay for long. They can invest in conventional and non-conventional products, provided they have a proper strategy.”

In view of the favourable conditions, he said, it was the right time for LIC to introduce new products. Without naming the products he said, “There will be at least four products in both the categories and at least one for women, though we have one of the best products for women, Jeevan Bharti, available in the insurance sector.”

When asked if it was a strategy to mitigate the lower premium figures, he said LIC’s premium income was down since

Life insurance premium collection down 20%.

Source: BusinessStandard

Life insurance premium collection down 20%.

The pension saga continues to take toll on the life insurance industry, particularly for the private players, as the number of policies issued by them is down by nearly 35 per cent, in the current financial year.

During April-October period, the number of policies issued by the largest life insurer, Life Insurance Corporation (LIC) of India, too, declined by eight per cent in the same period. As a result the first year premium collection of the life insurance industry, was down by 20.04 per cent to Rs 55,737.84 crore as against Rs 69,707.92 crore in the corresponding period last year.

According to the data collected by the Insurance Regulatory Development Authority (Irda), during 2011-12, life insurance industry sold close to 19.6 million policies, 15.31 per cent lower, compared to 23.14 million policies sold in the same period last year. In the same period, number of policies issued by the private players came down to 4.15 million from 6.34 million.

“Pension plans, which consisted of about 30 per cent of the sales, specially for the private players till the new regulations came into force in September 2010, now account for only 1.7 per cent of sales. Hence, the sales are down,” said S B Mathur, secretary of the Life Insurance Council.

The Council says premiums collected from pension plans dwindled to Rs 600 crore in the first