Mumbai, May 15 The state-run life insurer, Life Insurance Corporation of Republic Of India (LIC) once again bes after to give push to its traditional concern rather than the unit of measurement linked concern in FY09 and have projected a mark of Rs 57,000 crore from new concern insurance premium alone during the current fiscal.

"We have got got trying to set more than push on traditional concern for some clip as we believe covering hazard should be the chief undertaking of an coverage policy . But the clients have shown overpowering penchant for unit-linked business," said, DK Mehrotra, managing director, LIC.

The corporation, which have additional lost marketplace share in FY08, had registered a sum of money fresh insurance premium income of Rs 43,000 crore which includes a sum of Rs 37,600 crore sourced from the unit of measurement linked concern and remainder from the traditional concern during the year.

During the current twelvemonth the corporation programs to sell 4.35 crore of policies and ULIP composition may come up down. " We are targeting to keep a ratio of 75:25 for the ULIP and traditional policies so far the ratio was at 80:20," said Mehrotra. LIC is also put to resuscitate its already launched product, Market Plus, which was phased out earlier.

Total insurance insurance premium for the LIC during FY08 was pegged at Rs 141,000 crore, out of which, Rs 43,000 crore came from new concern premium, Rs 17600 crore came from pension and remainder are from renewals during the year. On societal sector front, LIC's client alkali stand ups at 1.75 crore. The ticket size of the conventional life coverage merchandises for LIC have reduced to Rs 6,000 while for linked concern it have grown to Rs 27,000 during the year. The corporation have sold 1.96 crore linked policies and 1.8 crore of non-linked coverage merchandises during last year.

On the growing presence LIC recorded a compounded growing was 16.86% from 2000, when the sector opened up. However, the corporation have been able to enter 33% on an norm for past four years, said Mehrotra. In fact, the LIC have already filed its application before Insurance and Regulatory Development Authority for the same, said Mehrotra.

Similarly, in footing of figure of policies, the LIC desires to keep the per centum for linked policies at 52%, leaving the balance for unit of measurement linked products.

Have you ever wondered how much you can salvage by just choosing the right manner of coverage premium payment on your life insurance policy?

Most life coverage companies add an other cost to your insurance premium if you pay in episodes rather than in one single shot during the year. So, the insurance insurance premium under the yearly premium option in a policy would be less than those under semi-annual, quarterly or monthly options.

This is true for all life coverage policies other than unit of measurement linked coverage programs (ULIPs). All traditional coverage programs including term assurance, endowment, money back and whole life policies would bear down a higher insurance premium for the monthly manner and less for a annual mode.

Let us take the illustration of Life Insurance Corporation's gift plan, Jeevan Anand. The annual insurance premium for the policy for a certain age profile and policy term turns out to be Rs 5,461.

However, if the same individual opts for the semi-annual option, it is higher up at Rs 5,546 (Rs 2,773 x 2 payments in a year). As the frequence of payment cut downs from annual to monthly, the insurance premium be givens to increase.

Under the monthly mode, the policyholder would be paying 8.33% higher than what a annual insurance premium remunerator would pay for the same policy, even though he have opted for the same term and sum of money assured, and belongs to the same age group.

But, why do coverage companies make this derived function charge? It is not because the coverage company will gain an involvement on all the money that you have got paid at the start of the policy twelvemonth rather than in a little measure throughout the year.

Rahul Aggarwal, main executive director military officer of Optima Hazard Management Services explains, "Every clip the insurance company have premium, there is a banking cost and processing cost attached to it.

Hence, as the cyclicity of payment decreases, insurance premium additions slightly. Sum of three monthly payments is more than than than the quarterly payment; sum of money of two quarterly payments is more than the half-yearly payment; so on and so forth."

Moreover, coverage companies claim that they too can cut down costs involved in following up on clients who bury to pay their insurance premium on time. The frequence of phone calls would increase in lawsuit of quarterly and monthly premium.

Some of them also issue missive reminders on insurance insurance premium payment owed dates, which can be reduced if the premium paying frequence is yearly, rather than semi-annually, quarterly or monthly.

It have got also been establish that those who choose for the quarterly manner of coverage premium are more than prostrate to policy oversights than those who have a annual manner of payment, according to a interpreter of a private insurance company.

Chances of non-payment are less likely in the monthly manner as companies take a firm stand on electronic glade service (ECS). Some companies even penalise policyholders who take monthly manner of payment and make not choose for ECS, by levying other charges.

It also salvages you the hurting of asking your agent to come up place and accumulate the checks each calendar month or one-fourth and keeping path of the assorted owed days of the month in the full twelvemonth and whether the checks have got actually been debited toward insurance premium payment.

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It was a case in point gone for life coverage industry. For the first clip Life coverage Corporation of Republic Of India (LIC) was beaten in insurance insurance premium aggregation and that too in 'individual non-single premium' segment. Private sector companies collected Rs 1,284 crore more than LIC in this segment.

LIC lost the land to private participants in the section as insurance premium aggregation growing in the section drop to 4% between April 2007 and February 2008 from 110% A twelvemonth ago.

The PSU managed insurance premium aggregation of Rs 19,894 crore in the above mentioned time time period just a 4% higher than Rs 19,073 crore it collected in corresponding period in the former year. During April 2006 to February 2007, LIC had managed 110% growing in insurance premium collections.

Asked about the grounds of sudden autumn in growing charge per unit of insurance premium aggregation in the segment, LIC functionary refused to comment.

Overall, coverage industry managed 38% growing and insurance premium in the section surged to Rs 41,072 crore in the said time period from Rs 29,605 crore a twelvemonth ago.

All the major private coverage companies, including Bajaj Allianz, SBI Life and ICICI Prudential, managed a CAGR of 100% inch the insurance premium collection.

"Last year, almost all private insurance companies focused more than on getting concern from non-single insurance policies which paid off in FY 2007-08," said head- West zone Bajaj Allianz Life Insurance, Amit Roy.

Entry of new participants in the life coverage industry have made the marketplace more fragmented, said Roy.

Last twelvemonth 110% growing of LIC coverage premium was more than because of launch of unit of measurement linked products, but the current twelvemonth have not been that good for the insurance major, he added.

"In the beginning of the FY 2007-08, we have got targeted entire insurance premium aggregation of Rs 8,500 crore and mean to publish 30 hundred thousand new policies. As concluding figs till March 2008 are not available we managed to accumulate insurance premiums to the melody of Rs 5130 crore as on February 2008," and all set to accomplish our mark said Roy.

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Private insurance companies see first insurance premium rise 82% during April-January period.

The life coverage marketplace grew 18 per cent between January and April this year, but state-owned Life Insurance Corporation of Republic Of India (LIC) saw a dip in its insurance premium income from the sale of new policies.

Though LIC managed to better its place in January 2008, thanks to a 110 per cent rise in first insurance premium income, it could not do up for lost ground. January being the start of the busy season also saw private life insurance companies double their first insurance premium income to nearly Rs 3,522 crore as against Rs 1,734.66 crore in January 2007.

The diminution in LIC's new insurance premium income have seen its marketplace share driblet from 77 per cent in April-January 2007 to 64 per cent during the first 10 calendar months of the current fiscal year.

What contributed to the dip? The public sector giant did not pull off to bag the big-ticket communal coverage concern as it had managed to make in the past. As a result, its first insurance premium income from this section drop 9.4 per cent to Rs 6,582 crore during April-January this year.

At the same time, LIC managed to throw its land in the individual concern marketplace and its income from the sale of new policies in this section were estimated at Rs 34,042 crore during the 10-months ended January 2008, compared with Rs 33,851 crore during April-January 2007.

In contrast, the 16 private participants saw their first insurance premium income rise 82 per cent to Rs 22,504 crore, bolstered mainly by an 88 per cent rise in individual business, which touched Rs 20641.41 crore in the first 10 calendar months this year. In the grouping concern space, the private participants clocked a 34.2 per cent rise in first insurance premium income, which rose to Rs 1,862 crore.

The LIC direction looks hopeful of recovering more than lost land in February and March, the extremum season for life coverage sales.

"It's a dynamical marketplace and there are jump to be variations. In, January and February (the information is yet to be released), we have got done well in individual policies. In the last one-fourth of last year, we had generated Rs 11,000 crore concern and we anticipate more than concern in the last one-fourth of this twelvemonth too," said A Kelvin Sahoo, LIC's executive manager director in-charge of marketing.

A senior company executive, while acknowledging the loss of the large rente and tip concern relationships in grouping businesses, said LIC means to concentrate on regular insurance premium merchandises in individual business.

"Now, people have got started trusting the private participants also with their long-term savings. Better service offered by some of them have got also helped," said a senior executive director with a planetary consulting firm.

"The two parts of the narrative are indeed the high-base of former year's growing and LIC's size relation to the private participant but that doesn't acquire us to any of the solution. It is now critical that LIC makes even more than on customer-centric measurements that output better growth: better client cleavage and de-averaged sales-force management could well be two of import keys to tackling this puzzle," said Nikhil Ojha, managing spouse at Monitor India.

MUMBAI:
Customers who have got recently bought Life Insurance Corporation of India’s
newly launched unit-linked wellness coverage strategy Health Plus, will be in for a
shock. Especially if they were
counting on the fact that the full insurance premium amount will be eligible for tax
benefits under subdivision 80D. It
is reliably learnt that the Insurance Regulatory and Development Authority
(IRDA) have written to LIC on Thursday request it to divide the benefits. As per this, only the portion
of hazard insurance insurance premium that business relationships for basic wellness screen will be eligible for
benefits under subdivision 80D, while the balance or premium that travels towards the
unit-linked strategy will have got to come up under subdivision 80C. An IRDA functionary said since
the merchandise was linked to investings and earned a return, as per the Income-Tax
Act, that part of insurance premium was not eligible for benefits under subdivision 80D. Under subdivision 80D of the I-T
Act, a individual acquires a tax deduction on insurance premium paid towards mediclaim up to Rs 15,000
(Rs 20,000 for senior citizens). Section 80C lets investment
up to Rs 1 hundred thousand to help taxation benefits. This subdivision covers all other investment
options like the payments on common funds, life coverage premium, refund of
prinicpal amount of a place loan, national nest egg certification and even public
provident fund. Adding one more
component in the word form of a unit of measurement linked wellness coverage plan, will intend the
investor will have got to apportion littler amounts to other investing avenues or
forego the possibility of getting any taxation benefit on this scheme. The part of hazard premium
assigned to the wellness screen in Health Asset is littler compared to the premium
amount assigned to the unit of measurement linked component. A senior LIC functionary said
that given this development the corporation will have got to discourse the issue
further and see its options. The functionary also added that LIC will
structure future merchandises in such as a mode to give upper limit taxation benefit under
section 80D. This change, say
agents, is going to be a immense disadvantage to customers. "Most of my customers
have been looking forward to a merchandise that lets them wellness cover, have a tax
benefit and also gives them a tax return on investment. That is the gross sales pitch we
have been using," states a Mumbai-based LIC agent. The agent told TOI that LIC had informed the agents that the taxation benefit available to customers
will be subdivision 80D.

MUMBAI:
Gone are the years when LIC, at the behest of the government, used to anchor
troubled stock markets. Today, the life insurance company have a authorization from ULIP
investors to purchase shares. Life
Insurance Corporation of Republic Of India have already purchased equity shares worth Rs
12,000 crore in the marketplaces this fiscal, with 80 per cent of its new business
premium coming from unit of measurement linked coverage merchandises (ULIPs). "Our investing in equity has
been Rs 12,000 crore this financial and Rs 32,000 crore in debt as on August 31,
2007," LIC's President Deoxythymidine Monophosphate Second Vijayan said on Friday after presenting the fillip and
financials for 2006-07. Birla
Sun Life Insurance pioneered ULIPs in Republic Of India just four old age back and LIC's first
ULIP merchandise was introduced in early 2005. Driven by ULIPs, LIC's
investment in equity marketplaces is put to duplicate this financial if current demand
continues. Meanwhile, the
total purchases of LIC in the stock marketplace this twelvemonth had already touched Rs
19,700 crore as compared to Rs 24,000 crore in the full financial of 2006-07. Besides entire ULIPs fund
investment of Rs 14,000 crore in marketplace this fiscal, another Rs 5,700 crore
exposure in marketplaces represented traditional products. Under ULIPs, up to 80 per cent
fund gathered by LIC could have got exposure to equity marketplaces in direct contrast to only 8
to 10 per cent exposure taken for traditional products. LIC's sum investing in the
capital marketplace as on March 31 stood at Rs 1,24,643 crore.

MUMBAI:
Insurance major Life Insurance Corporation of Republic Of India (LIC) is evaluating the
option of command for IFCI. The Delhi-based term-lending establishment have invited
bids for a 26% interest in the company. The commands are slated to fold on September
14, 2007. Speaking to ET, LIC
managing manager DK Mehrotra said, “We have got not yet submitted a bid. But
we are considering it.” Mister Malhotra declined to give additional details. Meanwhile, beginnings said the interest bargain would supply LIC an chance to build
its plus base. According to
sources, the country’s biggest coverage company have been approached by a
number of private equity houses and hedgerow finances to offer for the IFCI interest as a
consortium. However, senior functionaries from LIC said that they would prefer to
bid alone. IFCI have said that a pool of four members can use for 26%
stake, but each pool should put up a Pb member. Private equity funds
and hedgerow finances are acute on LIC or IDBI as their lead
member. Among North American Indian entities,
Punjab National Depository Financial Institution (PNB) have shown involvement inch acquiring 26% in IFCI. Similarly, respective foreign Banks and private equity houses have got approached IDBI
to offer as a pool for IFCI. “We are not very acute to offer as this
juncture,” said a senior functionary from IDBI. Even as many foreign entities
have shown involvement in IFCI, beginnings said the Central authorities is very keen
that the controlling interest goes on with North American Indian fiscal firms. “Further, the direction of IFCI, too, is acute on inducting an investor
who is serious, and would enable IFCI to emerge as a stronger
institution,” said a senior IFCI official. The FI, too, have indicated the
applicant itself should be in the concern of fiscal services. These are some
of the chief grounds for private equity houses and hedgerow finances looking at bidding
as pool with North American Indian participants like IDBI and
LIC. IFCI have also stipulated
that there would be a lock-in time period of, at least, three old age for the investor
who gets 26% interest in it. According to the criteria put by IFCI, the
applicant’s plus book should not be less than Rs 10,000 crore or it
should have got a nett worth of Rs 4,000 crore as of March 2006.