Life Insurance Corporation (LIC) has decided to pay 40 per cent higher bonuses and dividends to the government and its customers, respectively, in 2016-17.
The Corporation has allocated Rs 47,387.44 crore as reversionary bonuses with profit to policyholders and paid Rs 2,494.08 crore to the government towards its share of surplus on within the country business, against Rs 34,207.58 crore and Rs 1,800.40 crore, respectively, a year ago, LIC sources said.
The Corporation has been able to maintain solvency ratio of 154.65 per cent against the statutory requirement of 150 per cent. The customers of policies like Jeevan Shree, Jeevan Pramukh, Jeevan Nidhi plan and Jeevan Amrit have received higher bonuses during 2016-17.
The Corporation has also declared bonuses for the customers of newly introduced schemes such as Jeevan Tarun, Jeevan Labh, Jeevan Pragati. One-time Diamond Jubilee year special reversionary bonuses have also been declared, ranging between Rs 5 and Rs 60 per thousand sum assured.
"2016-2017 was a great year business-wise though we had to face an extremely competitive scenario. We not only need to understand the competition but be two steps ahead," VK Sharma, LIC chairman, said, addressing the corporation's 57th annual senior divisional managers' conference here recently.
PTI has seen a copy of the chairman's speech. "If we do not think out of the box now, it will become extremely difficult for us to maintain our position as a market leader in future," he said.
The corporation had realised a profit of Rs 19,302.46 crore by sale of equity and generated an investible surplus -- the total amount of funds invested -- of Rs 3,61,654 crore during 2016-17. The corporation has invested Rs 2.60 trillion in central and state government securities with average annualised yield of 7.65 per cent during the year. An investment of Rs 27,350 crore was made by LIC in corporate bonds at 7.80 per cent and an investment of Rs 41,751 crore was done in equities during the year gone by.
According to Sharma, "as far as investments of LIC are concerned, we have done very well despite the fact that the year that has gone by was eventful and challenging. The economy is estimated to have grown moderately by 7.1 per cent in 2016-17 from 7.6 per cent in the previous year."
As an advanced measure to reach out to customers, the corporation has started a mission office to fast-track digital transformation and focus on specific projects which are critical to attract youth in particular and masses in general to brand LIC, he said.
LIC has decided to tap two segments -- millennials and high-earning youngsters who often fall victim to economic volatility. Millennials, Sharma said, are dominating the commerce space now. Whether it is basic commodities or luxury items, everyone is trying to capture a big chunk of segment.
"We have to move in tandem with them, get into their mindset. Economic volatility leaves, this generation of executives, vulnerable and I see a huge opportunity for LIC to tap into this segment," he said, adding "LIC should be a major part of their investments and savings portfolio, because LIC does have products which can insulate them from such stark contrasts in life.
"Mission office is expected to identify and prioritise the Corporation's initiatives, execute them on a mission mode, ensure coordination and project deliverables in a time-bound manner," Sharma said.