)
Life Insurance Corporation of India will have a new unit-linked plan (Ulip) by the end of this financial year, chairman S K Roy said. Speaking at a summit hosted by Asia Insurance Post, he said their design team was working on the product.
After the new norms for traditional products kicked in from January 1, 2014, life insurance companies had to stop selling existing products and introduce new ones. LIC, too, had to withdraw its products from the market and introduce new guidelines-compliant variants of the products, which included money-back plans. However, there was no Ulip launch in 2014. Ulips constitute less than 10 per cent of the total product mix of LIC and the rest comprises traditional life insurance products.
The last time the life insurer launched a Ulip plan was in January 2013, that too after a gap of two years.
Roy explained its number of products has come down significantly from 60 insurance products to 16 life insurance products and eight group insurance products.
LIC has also made equity investments worth Rs 20,000 crore. “We have a long bull run and this is an opportunity to book some profits. Since we are a long-term investor, we have to a do a balancing act," he said.
The Centre has planned to monetise its holding in Specified Undertaking of UTI, or Suuti, through an exchange traded fund, expected to raise Rs 7,000 crore. On this proposal, Roy said: “We as an investor will respond to situations as and when they arise.”
LIC's total investment might cross Rs 3-lakh crore in FY15. In FY14, the insurer had invested Rs 2.25-lakh crore, of which about 15 per cent was in equity. Every year, the LIC research team studies each company and its fundamentals before taking any ‘buy’ or ‘sell’ decision. The insurer is a long-term investor in the stock market and stays invested for 8-10 years to book good returns.
According to the original plan, the insurer would grow its corpus to touch Rs 32-lakh crore by 2020. According to the public disclosures by the insurer, it posted net profits of Rs 1,656.68 crore for FY14 up from Rs 1,437.59 crore in FY13.
