Undeterred by the contraction in the insurance industry in recent months, state-owned Life Insurance Corporation (LIC) is targeting a business of over Rs 3,00,000 crore by 2011-12.
“Our premium growth over the period has been over 20 per cent each. This year we are targeting Rs 1,75,000 crore (total premium). At 20 per cent, in three years, it will increase to Rs 3,00,000 crore,” LIC Chairman T S Vijayan said.
“Anything more than Rs 3,00,000 crore after three years would be a bonus for us,” he said. With the Rs 1,75,000 crore total premium by the end of current financial year, the life insurance giant is looking at a market share of about 75 per cent.
Talking about new business target for this year, Vijayan said the insurer expects to earn first year premium of Rs 57,000 crore even when the private sector insurers are uncertain about meeting the targets due to economic slowdown.
“I would still believe that we should get Rs 57,000 crore. LIC is not in a habit of revising target mid-way,” he said.
Vijayan said, “In the first quarter, our market share went down to 49 per cent then brought some new products ... We have taken corrective steps for it. I think we will be able to get that. So, going forward we are looking at 60 per cent.”
Last year, LIC collected first premium of Rs 43,800 crore and commanded a market share of 63 per cent. However, the market share of LIC declined to 55 per cent in November 2008, with first premium collection at Rs 25,220.62 crore. On the decline in the market share, Vijayan said, “Ulips had overtaken all other policies till March (2008). When we analysed the portfolio in the month of March, we thought that this is not the right way of selling insurance in a country like India.”
So, for the first three months, LIC did not bring replacement product, he said, adding that on top of it, the company withdrew some product in March without introducing replacements in the market.
“That had created a big vacuum. The absence of the product in the right market,” he said.
“May be it was conscious decision. It was felt that top line would go up but what we are sacrificing is something else. We wanted to push other things,” he added.
