Vijay Kumar Sharma, Chairman, Life Insurance Corporation
With Life Insurance Corporation of India (LIC) Chairman Vijay Kumar Sharma nearing retirement and three of its managing directors to follow suit in the next few months, the organisation is likely to see a rehaul at the top. This is, unless the central government renews Sharma’s term.
“If, in case, Sharma demits office after the end of his term and the government does not give him an extension, then one of its managing directors may be made temporary in-charge until the government appoints a full-fledged one,” sources said. Sharma’s superannuation is due at the end of December 2018.
V K Sharma was appointed for five years chairman after S K Roy resigned abruptly nearly two years before his term was supposed to end. However, he will retire at the end of the month when he turns 60.
The other managing directors, three of them, are all nearing their retirement age of 60. Hemant Bhargava, Sunita R Sharma, and Bhaskaran Nayar Venugopal are the three seniormost managing directors of the company. In normal course, all three would hang their boots by middle of next year.
It is not clear when the government will set in motion the process to select people for the top posts. One post of managing director is vacant.
Sources also said while this is a major issue, it will not hamper day-to-day working as the system and practices are well set. The challenge is on strategic calls and long-term decisions.
People in senior positions such as executive directors, who could be in running for higher posts, are experienced hands. They are well versed with the processes, decision making and responsibilities that go with top jobs, so it ensures continuity and stability.
Sharma was appointed the acting LIC chairman on September 16 and on December 16 he took over as the chairman.
Prior to this, Sharma was the managing director of LIC from November 1, 2013 to September 16, 2016. He also served as the managing director and CEO of LIC Housing finance from December 2010 to November 2013.
The performance of the state-owned entity has moved in the slow lane in the current financial year.
According to Insurance Regulatory and Development Authority of India (Irdai) data, in April-November period of FY19, the LIC saw its first-year premium shrinking by 7.93 per cent over the year-ago period. This led to a tepid growth in the entire life insurance sector’s first-year premium of 0.33 per cent.
First-year premiums earned by life insurers amounted to Rs 1.23 trillion in April-November 2018 as against Rs 1.22 trillion in the same period in 2017. However, the private life insurers reported 23.22 per cent rise in first-year premiums in April-November period over the last fiscal.
LIC’s first-year premium was Rs 831.48 billion in the April-November period of FY19, as opposed to Rs 903.14 billion for April-November period of FY18. Moreover, LIC’s first-year premium in November declined by 22.9 per cent to Rs 95.11 billion from Rs 123.36 billion in November 2017.
But the private insurers earned Rs 53.46 billion in November from their first-year premiums, up 14.78 per cent from Rs 46.58 billion in November 2017.