When asked about LIC’s view on the Essar Oil-Rosneft deal, Sharma said the life insurer fully supported the deal, provided the Ruias, the promoter family, reworks the deal structure that meets LIC’s investment terms or repay the about Rs 2,300 crore loan.
The chairman said LIC’s equity investments in FY18 would be about 20 per cent of its investible surplus, which would be in line with the average it has maintained over the past few years.
“We are not a player in the market, but we invest in the market for customers’ returns. We keep an eye on the market and when we feel that there is a reasonable scope of investing, that is when we put money in the market. But, our focus is on long-term investment,” he said.
In FY17, LIC saw its first-year premiums jump 27.2 per cent year-on-year (y-o-y) to Rs 1.24 lakh crore on a surge in single-premium policy sale and falling interest rates. Its market share went up from 70.61 per cent to 71.07 per cent in the same period.
While LIC projected double-digit growth in both single and non-single new business premium (84.22 per cent and 10.18 per cent, respectively), there was a decline in the number of policies sold in FY17, which declined to 20.1 million from 20.5 million in FY16.
Sharma said the reason for the fall was of lack of availability of new products. The Insurance Regulatory and Development Authority of India (Irdai) in 2013-14 had discontinued around 80-100 products. Since then, LIC has 26-27 products in the market and it would take a couple of years for them to return to the growth levels of earlier years.
The new product LIC launched on Tuesday is a long-term endowment policy covering up to 100 years of age and offering a combination of income and protection, including an assured annual return of eight per cent. Jeevan Umang provides for annual survival benefits from the end of the premium paying till the age of 99 and a lump-sum payment at the time of maturity or on death of the policyholder during the policy term, Sharma said. Policy holders from the age of 90 days to 55 years can buy this policy. There is no upper limit on the basic sum assured but it should be in the multiple of Rs 25,000 with premium paying terms having option of 15, 20, 25 and 30 years.
The unique selling proposition of the plan is that guaranteed survival benefit is payable on the life assured surviving to the end of the premium paying term, provided all due premia have been paid or the paid-up value, for instance Rs 2 lakh if the policyholder has paid three premiums.