LIC, which suffered a dent in premium income in the first six months of this fiscal year, has chalked out strategies to ensure a 40-45% growth.
Targets 40-45% growth for the rest of the year
KOLKATA: The Life Insurance Corporation (LIC), which suffered a dent in premium income in the first six months of this fiscal year, has chalked out strategies to ensure a 40-45% growth in business in the remaining six months.
While it will focus on non-single premium plans, the life insurer will reposition some popular traditional products like Komal Jeevan, Jeevan Anand and Jeevan Tarang in a bid to increase the first year renewal premium income in the coming months.
“We have taken necessary initiatives to achieve a planned growth rate of about 45% in the remaining months of the fiscal, chairman TS Vijayan, told DNA Money in an interview. “This will enable us to achieve of our budgeted premium of Rs 52,500 crore under individual business.”
LIC has planned to collect at least 20% of its total new premium income through conventional products and the remaining from unit-linked products. Its market share in first year life insurance premium income fell to 57.6% in October from 82.6% a year ago. The September figure was even lower, at 49%.
“We have several new product ideas and we would like to launch them depending on market conditions after getting Irda approval,” he added. “We have taken steps to grow above the industry rate. Among them are popularising select premium intensive plans, tapping potential of the pension market, opening more satellite offices, introducing new plans and repositioning existing ones.”
Positive on the unit linked plans (Ulips), Vijayan said, “Ulips are the drivers of growth in view of spectacular growth of the stock market. They will continue to be the main focus, but we are also repositioning our conventional products in order to achieve sustained growth in total new business premium income.”
Unlike last year, when the percentage contribution of single premium in the first six months was as high as 80%, LIC saw a sharp decline in its single premium plans in the first six months of this year.
The company has noted the drop in these plans and “corrective steps” are being put in place to show improvement in the second half of the year. Explaining the trend, Vijayan said, “Being a lump sum payment, a single premium enhances the growth of new business premium and market share, but does not contribute to renewal premium income. Since life insurance contracts are of a long term nature, growth in renewal premium is critical for a life insurance company.”
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