LIC to invest Rs 40,000 cr in equity market

[B. Karthick]

Life Insurance Corporation of India (LIC) proposes to maintain its
annual investments in the equity market at last financial year’s
levels at Rs 40,000 crore. This was announced by LIC chairman TS
Vijayan here on Tuesday.

LIC, however, aims to grow its premium income by 20% to Rs 1.80 lakh
crore in 2009-10 compared with Rs 1.55 lakh crore in the preceding
fiscal. The insurer expects to grow its first year premium income by
25% over Rs 52,000 crore in 2008-09. Incidentally, its first premium
income fell by nearly 10% during 2008-09. According to the LIC
chairman, the country’s largest insurer has done good business during
April to June, this year.

Talking to the media on the sidelines of an event organised by Ficci’s
eastern regional council, Mr Vijayan said: "Last year, we invested Rs
40,000 crore in equities. We plan to keep our equity investment around
this level or may be a little more than this." As per LIC’s exposure
norms, it invests in government papers and corporate debt too.

The LIC chief added that he expected the company to perform better
this fiscal as the economy is showing signs of a revival. "Last year,
growth in new premium income was hit largely by the economic slowdown.
Now, the economy is doing well and more importantly, it has shown
stability. This would prompt people to take more risk cover," he said.
Improvement in GDP has typically fuel demand for insurance in
developing economies.

While delivering his address at the event, Mr Vijayan said India
happens to be one of the more sought after destinations for global
insurance companies. Going forward, he observed the economy would
emerge as the most ’s attractive destination.

B.Karthick
Research Analyst.