Life Insurance Corporation (LIC) has set up a separate division for pension services which indicates that the corporation, in the future, may form a wholly-owned subsidiary on pension.
O P Dubey, zonal manager, LIC (eastern), said the pension market is vast in the country which practically remains untapped. A study on the country's pension market and its potential was recently undertaken by the Indian Institute of Management, Bangalore. The study revealed that the pensionable population in the country stands at 120 million. At present, LIC, through its annuities and different policies, covers only 1.2 million of this population.
LIC pension-linked policies are now restructured in such a way as to offer death benefit along with life cover. Indications are there that some other innovative measures may be taken to make the LIC pension policies and annuities more attractive.
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Since the creation of a pension fund opens up vast possibilities, the corporation feels that the private sector may make an entry into the field when the insurance sector opens up. A separate pension division, LIC hopes, will help the corporation to meet the threat from domestic and foreign companies.
Speaking about the achievement of the LIC eastern zone, Dubey said its share to the corporate business stands at 21.79 per cent in terms of policy, 19.26 per cent in terms of sum assured and 18.91 per cent in terms of first premium.
In 1997-98, the eastern zone has 2.9 million of policies for a sum assured of Rs 12,252.66 crore and first premium of Rs 397.07 crore.
In the current year, the target has been set at selling 3.2 million policies with sum-assured of Rs 14,030 crore and new business premium of Rs 47,600 crore. The zone showed a surplus of Rs 1,206 crore in 1997-98 and this year's target has been set at Rs 1,435 crore.
The increase in number of policies from 1993-95 to 1997-98 in the following parts of the zone is in the following manner: north-east sector from 2.61 lakh to 4.53 lakh, West Bengal from 9.31 lakh to 12.86 lakh, Bihar from 5.16 lakh to 7.70 lakh and Orissa from 2.68 lakh to 3.88 lakh.