Life Insurance Corporation of India (LIC) posted a sharp rise in premium income in July and August after facing a muted first quarter of FY21. The rise is on account of surge in sales of bigger pension and term assurance policies.
The state-run insurer recorded a 40 per cent month-on-month growth in individual premiums in July and August, Mint reported. The first quarter of the ongoing fiscal remained dismal for the insurance sector in general due to the coronavirus induced lockdown. India's largest life insurer has since shifted its focus to selected but bigger policies, LIC managing director Vipin Anand told the daily.
"Apart from high net-worth individuals (HNIs) who are buying big-ticket policies, customers belonging to the middle class too are now buying policies with Rs 12-15 lakh sum assured, which was earlier at around Rs 7-10 lakh," Anand also told the daily. Uncertainty of life amid the ongoing coronavirus crisis has pushed people to buy insurance products, Anand noted.
Company's new business individual single premium in July was nearly 69 per cent higher at Rs 3,304 crore as against Rs 1,961 crore in July 2019. LIC plans to achieve a new business premium to the tune of Rs 18,800 crore for August. It is 10 per cent higher than in August last year.
Meanwhile, LIC had recently revealed that its gross non-performing asset (NPA) ratio in the debt portfolio has jumped to 8.17 per cent as of March 2020 compared to 6.15 per cent as of March 2019. The total rise in net NPA ratio stood at 0.79 per cent in FY20 as against 0.27 per cent in FY19.
The government aims to list LIC on the domestic bourses in the January-March quarter of the current financial year. With the IPO of LIC, the government plans to achieve around Rs 2.10 lakh of its budgeted disinvestment target.