VIPIN ANAND, Managing Director of Life Insurance Corporation (LIC), India’s largest financial institution with total assets of Rs 31.96 lakh crore, spoke to GEORGE MATHEW about business during the Covid period, investments, listing and stock market profits. Edited excerpts:
LIC’s new business premium income has fallen in the Q1 of FY2021 and in July. When do you see a recovery?
There were serious difficulties in April and May due to severe lockdown but from June, things have started picking up. In fact, for the month of July, there was 34.77 per cent growth in premium year-on-year basis. LIC’s market share in FYPI (first year premium income) has increased substantially. During the last FY2019-20, our market share as on March 31 was 68.92 per cent and as on July 31, 2020, the market share in FYPI is 71.49 per cent, which shows an increase of 257 basis points. As of July 2020, overall growth under individual FYPI is 2.77 per cent and we are confident that it will go upwards every month.
Under policies, we are in the negative but the volume is increasing month to month and we will be in a comfortable position soon on this count also.
Do you think the expected contraction in GDP growth and financial problems being faced by customers will affect LIC’s business?
Certainly, all the sectors have linkage with GDP directly or indirectly. But being a marketing organisation, we have to find out opportunities all the times. On the one side, Covid has disrupted many sectors and economy to some extent, still few sectors are shining like anything … for example, pharma, chemical etc.
For life insurance and health insurance sectors, Covid-19 has created huge awareness. We are experiencing that our renewal premium in numbers and amount is showing increasing trend. Individual new business premium is also increasing. Hence, we do not foresee any impact on our new business or renewal premium income. Instead, we are hopeful that we will achieve growth on all the counts once again as in last year.
Will the decline in premium income affect LIC’s investment in the capital market and G-Sec this year?
Our premium income has started increasing now … hence, it will not impact our investments in the capital market as well as government securities (G-Secs). Already we have made huge investments in both the segments.
What was LIC’s profit from sale of shares in the stock market in fiscal 2019-20 and till July end? Has it declined in the wake of the stock market crash? Are you a net buyer or seller in the equities?
Last year’s profit was more than Rs 25,000 crore and in the current year it has already crossed Rs 10,000 crore. Whatever and wherever we invest, it is for long term. We always try to find out available best opportunities in the market whether for selling or purchasing. We don’t calculate profits on a daily or monthly basis. For a layman, there may be crash in stock market, whereas it is an opportunity for us.
Do you think listing of LIC shares on the stock exchanges will happen in fiscal 2020-21? How is your preparation for this? Is there any kind of restructuring plan for LIC?
All the decisions regarding listing of LIC shares are taken by DIPAM, Ministry of Finance, Government of India. However, from our end, we are supplying all necessary information as and when required and there is lot of activity from the government end also.
Are you planning any new product in the current year? Are you looking at the health insurance segment including Covid-19?
Yes, in the month of March, we have launched two new ULIP product — NIVESH PLUS and LIC’s SIIP. Recently, on August 25, we launched Jeevan Akshay VII. Some other products are in the pipeline.
What are the overall restructuring and customer friendly measures in terms of digital facilities you have put in place to grow your business post–Covid ? Has your online business gone up due to lockdown? How are customers managing things?
Many initiatives have been introduced in these Covid times. Now you can pay your premium by visiting our customer portal or directly on our website without any extra charges through your credit card and debit card. One can pay premium through various banks viz. any branch of IDBI Bank, Axis Bank, City Union Bank, any of 360,000 common service centres and online portals like AP online, MP online, Suvidha and through popular digital modes like Amazon Pay, Google Pay etc. You can also pay your premium through electronic debit using BILLPAY or NACH. You can pay it through our merchants (premium points, Life Plus offices) spread all across the country. Our own branches and SOs are also there to serve customers.
As far as collection of premium through digital mode is concerned, total number of transactions during current FY (till July 31, 2020) is a whopping Rs 5.81 crore, showing a growth of 65.44 per cent. In collection of amount, the growth is nearly 105 per cent. There is considerable growth under total renewal premium also.
Premium growth in our online new business is 130.93 per cent. Under online policies also, growth is 98.37 per cent as on July 31.
Have you seen more surrenders and defaults in premium payment?
In fact, it is the other way round … with the rise in insurance awareness due to Covid-19, surrenders have substantially fallen.
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