Cash Crunch Hit LIC’s Premium Collection By 25%, Chairman Says

Life Insurance Corporation of India (LIC) saw its insurance premium collection fall by as much as 25 percent for the first 15 days after the government’s move to demonetise old high-value currency notes on November 8, said its newly appointed Chairman VK Sharma.

It took more than a month for the situation to normalise, added Sharma, who took over on December 14 last year. Despite that overhang, LIC managed to achieve its FY17 target of Rs 31,000 crore in new business premium income and the state-owned insurer wants to take the figure to Rs 35,000 crore by the end of the current financial year, the LIC chairman said in a media briefing.

Total premium income went up by 12.4 percent to Rs 1.45 lakh crore in the first nine months of the current financial year on a year-on-year basis. Total assets under management also increased by 12.8 percent to Rs 24.41 lakh crore in the same period. Pension and group scheme business of LIC accumulated Rs 51,004 crore in the first nine months of FY17 compared to Rs 40,118 crore, said Sharma.

The country’s largest insurer has also reduced its fresh investments in Indian equities by as much as 37 percent in this financial year. LIC has put in Rs 39,705 crore over the first nine months of FY17, compared to Rs 64,000 crore during the same period last year. This is because its in-house fund managers thought market valuations were on the higher side, Sharma told reporters. The insurer managed to book a profit of Rs 16,000 crore from equity investments between March and December, he added.