Forbes India 15th Anniversary Special

LIC's total assets climb by near 13% to Rs 24.4 lakh crore as of December 2016

Investments into equity markets likely at Rs 50,000 crore in next fiscal

Salil Panchal
Published: Feb 27, 2017 05:53:38 PM IST
Updated: Feb 27, 2017 06:22:49 PM IST

LIC's total assets climb by near 13% to Rs 24.4 lakh crore as of December 2016
Image: Danish Siddiqui / Reuters

India’s largest life insurer, Life Insurance Corporation of India (LIC), posted a 12.81 percent growth in total assets to Rs 24.42 lakh crore as on December 31, 2016, compared to Rs 21.64 lakh crore for the previous year. The financial institution – which, in a rare event, met the media to discuss its financial performance – posted a growth of 12.43 percent in total premium income at Rs 1,45,031 crore during the nine months to December 2016 as against Rs 1,29,001 crore for the corresponding period a year earlier.

“This performance was in line with our expectations,” LIC chairman VK Sharma told the media.

The new business of the corporation was also “impressive”, its chairman said, with a 40.11 percent rise in first year premium. Pension and group schemes (P&GS) business grew by 27 percent to Rs 51,004 crore, against Rs 40,118 crore, in the nine months to December.

LIC, besides being a premium financial institution, has a stake in several of India’s top corporations. It has also been an active investor in India’s equity markets, traditionally buying into stocks on declines.

In 2016-17, LIC had reduced its investment target for the equity markets to Rs 50,000 crore from Rs 60,000 crore in the previous year. This was in line with the insurer’s investment pattern under which it allocates about 25 percent of its investible surplus into the equity markets.

Sharma refused to offer an exact figure relating to investments towards equities in 2017-18, but when asked if the target would be the same as last year, Sharma said: “You could keep it at that.” For the nine months to December, it has bought stocks worth Rs 39,000 crore, which had resulted in a net profit of Rs 16,000 crore, in the current financial year.

“Overall we are bullish on the equity markets, but we do not operate like active traders,” Sharma told the media. Sharma said he expected India’s pace of growth to improve next year. For the current fiscal year, India is forecast to grow at between 6.75 percent and 7.5 percent in 2016-17, according to the annual economic survey, which was tabled in Parliament recently.

He said gross yields on investments were at 8.18 percent.

Sharma was also confident about the life insurance industry, adding that it was on a “growth curve”. LIC’s gross total income grew by 15.76 percent to Rs 337,465 crore against Rs 291,511 crore for the nine months to December 2016.

In a bid to boost its digital presence and catch up with private life insurers, Sharma said they had created a “mission office” to go digital. According to data, about Rs 6.5 crore worth of transactions have come through LIC’s digital platform, officials said.