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LIC says will seek clarification from Cairn if needed: SK Roy

Thursday, 7 August 2014 - 7:45am IST | Agency: dna

The markets are on an upswing after the new government has come into power. Life Insurance Corporation (LIC), the biggest institutional investor in the country, too is gung-ho on the future. S K Roy, LIC chairman, spoke to Tarun Sharma on his organisation's plans and insurance industry outlook. Excerpts from the interview:

The market has performed well in the last nine months. There is clear mandate for the government too. So, what is your view on insurance sector industry performance for this year?
Yes, sentiments have improved a lot and investors are full of optimism. We think the future is bright. Improvement is evident on ground also. Our first quarter performance has been good, and the second quarter has got off a decent start.

How much growth do you see in the insurance sector and the investment scenario unfolding this year?
We have a challenging target of 10% for first premium collection in life insurance business. We are hopeful of exceeding this target. And investments will depend on our core business. Investment surplus will rise if our core business takes off on pace.

Which are the best sector where LIC is investing?
The government is focusing more on infrastructure and power. So, we also think these two sectors will perform in future. Traditional sectors such as banking, IT, pharma and capital goods will also give return in coming years. So, we are continuing investment in these sectors and as well in infra and power.

What is investment surplus expectation, and in which segment your money will go?
Yes market have performed well in last three years So, we are expecting Rs 3 lakh crore of investment surplus. If you ask me category then we will invest 15% in the equity segment. Other investment options are also open for us.

Do you have any plan of launching unit linked insurance products?
Currently, we don't have any Ulip product in the market. However, we are thinking that we should have a product in the category. At the right time we will enter this market.

The market was expecting disinvestment in LIC? What is your view on this as chairman of LIC?
This decision has been taken by government. I don't have individual view on this issue. I believe that government's decision will be in everybody's favour.

Recently, the union cabinet hiked FDI limit in insurance to 49%? Do you think this move will help in increasing penetration?
Capital increases the productivity of insurance. Productivity will increase the impact on coverage of insurance, so automatically penetration will also rise.

In recent times, many cases relating to corporate governance have come out. Starting from Maruti Suzuki, JSW and now Cairn-Vedanta. But every time the institutional investors remain silent till proxy firms react...
Listed companies are well regulated. Listed companies' compliance with Companies Act & regulated by the Securities and Exchange Board of India. If such instances happen then it doesn't mean there is a systematic fault. And we always protect our rights and interests. We have an open talk whenever we sense any issues related to our rights and interests. We will seek clarification from Cairn and Vedanta (on Cairn's India's loan to group company) if required.

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