The Life Insurance Corporation of India (LIC) has declared higher bonus rates for the 2011-12 year under seven of its ‘With Profit Plans’ and Loyalty Additions under seven other plans, the country’s largest insurer announced on Friday at a press briefing in Mumbai on the occasion of its 55th anniversary celebrations.
The bonus was declared in seven plans, namely, Jeevan Anand, Jeevan Tarang, Jeevan Madhur, Child Future Plan, Jeevan Shree I, Jeevan Bharati I and Jeevan Pramukh, all in the range of Rs. 1 – Rs. 6 per thousand sum assured.
Out of a net actuarial surplus of Rs 227.16 billion, which rose 10% from a year ago, bonus has been allocated to participating policyholders to the tune of Rs 215.8 billion versus Rs 195.57 billion the year ago.
LIC’s market share in terms of number of policies stood at 78.41% and that in terms of premium stood at 72.43% as on July 31, 2011.
Talking on growth in premium income, S. Roy Chowdhury, Executive Director (Marketing), said that there has been negative growth so far this year as no new products like Market Plus were introduced.
“Market Plus contributed to the premiums last year and so far we have not introduced a product like Market Plus which is why there is negative growth," he said.
However, the situation was expected to improve from hereon, as LIC is confident of achieving its targeted premium income of Rs 540 billion in FY12. The insurer’s income from premium stood at Rs 480 billion last fiscal.
LIC is expected to introduce new products shortly, which would aid the growth in its premiums.
LIC’s investment in equity markets in the last fiscal year was approximately Rs 2 trillion. This year, the company believes the investment ‘should be above that,’ said Vipin Anand, Executive Director (Corporate Communications).
When asked about the breakup of the targeted investment, Anand said it was not possible to provide a breakup as it depends on the developments in the market and the opportunities available. “It also depends on when the flow of premium comes at a particular time,” he said.
Among its existing policies, Jeevan Saral, Jeevan Anand, Jeevan Tarang and Endowment Plus were the popular ones. “All the popular products have higher bonuses this year which will hopefully rise further,” said Anand.