LIC's goal is 'Insurance for All' by 2047, policy numbers should grow from Q2: R Doraiswamy, MD & CEO
's new chief executive R Doraiswamy
is betting on a diversified product mix and higher sales through bancassurance channels to keep the state behemoth ahead of private rivals. In his first interview since taking over, Doraiswamy discusses with ET his plans on increasing the share of non-participating products to 40% of annual premium equivalent-a switch that is key to boosting profitability.
Edited excerpts:
Your market share in individual policies is 39% by count and 63% by premium. How do you see policy volumes growing?
Finance
Value and Valuation Masterclass Batch-1
By CA Himanshu Jain
View Program
Finance
Value and Valuation Masterclass - Batch 2
By CA Himanshu Jain
View Program
Finance
Value and Valuation Masterclass - Batch 3
By CA Himanshu Jain
View Program
Artificial Intelligence
AI For Business Professionals
By Vaibhav Sisinity
View Program
Finance
Value and Valuation Masterclass - Batch 4
By CA Himanshu Jain
View Program
Artificial Intelligence
AI For Business Professionals Batch 2
By Ansh Mehra
View Program
The broader goal is "Insurance for All" by 2047. The industry saw a drop in volumes after last year's product rule changes, but our sales have stabilised. We expect growth in policy numbers to turn positive from the second quarter onwards, with stronger momentum in the third and fourth quarter. Market share being a by-product of growth, when LIC grows at a rate higher than the rest of the industry, my market share is going to go up.
by Taboola
by Taboola
Sponsored Links
Sponsored Links
Promoted Links
Promoted Links
You May Like
Undo
LIC's margins improved 150 bps in the first quarter to 15.4%. Is it sustainable and when can you match private sector levels of around 25%?
Three factors drove our margin expansion-higher non-PAR contribution, expense optimisation, and revised commission structures following the October 1, 2024 norms on products. There were some changes in some products, we had to be compliant with the surrender value norms, tweak the agency commission from being totally front-ended to introducing some deferred payments of commission.
Our margins also follow a seasonal pattern, rising from the first quarter to the fourth because PAR profits are booked in the last quarter. We have consciously shifted from a 7% share in non-participating (non-PAR) annual premium equivalent (APE) at the time of listing to around 30% now. This could rise further to 35-40% in the near term, before we balance the mix back towards participating (PAR) products.
Live Events
Which products will drive growth this year?
Customer preferences vary. Younger buyers lean towards guaranteed non-par protection products, while others prefer savings-oriented participating or non-participating plans. ULIPs see strong demand in rising markets and a slowdown when markets dip. This year, we expect ULIPs to grow alongside non-PAR savings and protection products.
We try to fill product gaps and cater to all segments from micro-insurance to high-ticket savings. Our recent launch, Jeevan Utsav, has already set a trend in the market. Over the next few months, we will bring out three to four innovative products across categories.
What is your vision for LIC?
LIC is a major financial institution player in the country, and they are playing a major role in developing India's economy for the last 69 years. If you look at what we have to do, our objectives are very clear, extend insurance coverage across the country at affordable prices, and mobilise savings for the welfare of policyholders while delivering decent returns. Globally, we are already the fourth-largest life insurer, and see whether we can still grow more.
LIC's share of bancassurance is less than 7% despite several bank tie-ups. Given open architecture in agencies, how do you plan to improve channel mix?
Our individual agency network is the backbone of LIC. It is a distribution strength we will continue to nurture. That said, we are changing in other channels, bancassurance and corporate. Our bank assurance premium share has risen from less than 3% two years ago to 6.77% today. We expect it to cross 10% in the near future.
LIC has recently invested large sums in Adani bonds and
SBI
QIP. How much investment is likely to come into equity markets from LIC this year?
When you have such large investable funds to be invested, you are looking at various options which are giving you a decent return. We need to look at both debt as well as equity in the proportion that we are supposed to invest. But at many times you find that you will do more on one side or the other based on availability. We have to have a clear rating of those instruments, paying certain dividends and stuff like that.
The regulator has allowed insurers to hedge through derivatives. What are your plans?
LIC has already started doing FRA (forward rate agreements), and now we are actively looking at bond forwards. Once we have enough tie-ups on that, we will be moving to bond forwards to hedge our interest rate risk only in perspective of our guaranteed protection. On the equity front, we are still weighing the options.
The Centre is talking about reducing stake to 90% in LIC by FY27 by selling 6.5%. How much of that will happen this year?
This decision will be taken by the government.
LIC owns a strategic stake in
IDBI Bank
. Will you continue to own a strategic share in the bank or exit completely eventually ?
The vision of LIC is to be a transnationally competitive financial conglomerate. That is a vision, if you look at this. So, when you are looking at a financial conglomerate, you would like to have a bank as a major partner, a housing finance company, or a mutual fund. But the Act and regulations do not permit LIC to have a bank of its own. Whereas a bank can have an insurance company, an insurance company can't promote a bank. That is what the problem is. RBI has already made their position clear.
What is the status of the health insurance venture?
We have the options in front of us. We are doing due diligence into existing SAHI (standalone health insurance) companies, which we can have a stake at. Only thing is, we are not fixing a particular time limit. We are examining those options.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
16 minutes ago
- Time of India
Oil prices little changed as industry report points to slowing US demand
Oil prices were little changed on Wednesday after falling in the previous session after an industry report showed U.S. crude stockpiles climbed last week illustrating the end of the seasonal summer demand period is nearing. Brent crude futures gained 3 cents to 66.15 a barrel at 0102 GMT after dropping 0.8% in the previous session. U.S. West Texas Intermediate crude futures fell 3 cents to $63.14 after declining 1.2%. Finance Value and Valuation Masterclass - Batch 4 By CA Himanshu Jain View Program Artificial Intelligence AI For Business Professionals Batch 2 By Ansh Mehra View Program Finance Value and Valuation Masterclass - Batch 3 By CA Himanshu Jain View Program Artificial Intelligence AI For Business Professionals By Vaibhav Sisinity View Program Finance Value and Valuation Masterclass - Batch 2 By CA Himanshu Jain View Program Finance Value and Valuation Masterclass Batch-1 By CA Himanshu Jain View Program by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like A Teaspoon Before Bed Burns Body Fat - Fit Into Your Clothes Again! gofitlifeguide Click Here Undo Crude inventories in the U.S., the world's biggest oil consumer, rose by 1.52 million barrels last week, market sources said, citing American Petroleum Institute figures on Tuesday. Gasoline inventories dropped while distillate inventories gained slightly. [API/S] Should the U.S. Energy Information Administration data set for release later on Wednesday also show a decline, it could indicate that consumption during the summer driving season has peaked and refiners are easing back their runs. The demand season typically runs from the Memorial Day holiday at the end of May to the Labor Day holiday in early September. Analysts polled by Reuters expect the EIA report to show crude inventories fell by about 300,000 barrels last week. Live Events Outlooks issued by OPEC and the EIA on Tuesday pointed to increased production this year which also weighed on prices. But both expect output in the U.S., the world's largest producer, to decline in 2026 while other regions will increase oil and natural gas production . U.S. crude production will hit a record 13.41 million barrels per day in 2025 due to increases in well productivity, though lower oil prices will prompt output to fall in 2026, the EIA forecast in a monthly report. The Organization of the Petroleum Exporting Countries' monthly report said global oil demand will rise by 1.38 million bpd in 2026, up 100,000 bpd from the previous forecast. Its 2025 projection was left unchanged. The White House on Tuesday tempered the expectations for a quick Russia-Ukraine ceasefire deal, which may lead investors to reconsider an end to the war soon and any easing on sanctions Russian supply, which had been supporting prices. U.S. President Donald Trump and Russian President Vladimir Putin are due to meet in Alaska on Friday to discuss ending the war. "Trump downplayed expectations of his meeting with President Putin ... However, expectations of additional sanctions on Russian crude continue to fall," ANZ senior commodity strategist Daniel Hynes wrote in a note.
Time of India
27 minutes ago
- Time of India
Dollar slips as investors eye September Fed cut
The dollar weakened on Wednesday after a tame reading on U.S. inflation bolstered expectations of a Federal Reserve rate cut next month, with President Donald Trump's attempts to extend his grip over U.S. institutions also undermining the currency. U.S. consumer prices increased marginally in July, data showed on Tuesday, in line with forecasts and as the pass-through from Trump's sweeping tariffs to goods prices has so far been limited. Finance Value and Valuation Masterclass - Batch 4 By CA Himanshu Jain View Program Artificial Intelligence AI For Business Professionals Batch 2 By Ansh Mehra View Program Finance Value and Valuation Masterclass - Batch 3 By CA Himanshu Jain View Program Artificial Intelligence AI For Business Professionals By Vaibhav Sisinity View Program Finance Value and Valuation Masterclass - Batch 2 By CA Himanshu Jain View Program Finance Value and Valuation Masterclass Batch-1 By CA Himanshu Jain View Program by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like When the Camera Clicked at the Worst Possible Time Read More Investors eyeing imminent Fed cuts cheered the data and moved to price in a 98% chance the central bank would ease rates next month, which in turn dragged on the dollar. Against the yen, the dollar was last 0.05% lower at 147.76, while the euro was steady at $1.1676, having risen 0.5% in the previous session. The dollar index last stood at 98.08, after falling roughly 0.5% on Tuesday. Live Events "The July CPI report showed less evidence of tariff pass-through to consumer prices...(but) I think a September rate cut is less than certain, probably not as certain as current market pricing," said Carol Kong, a currency strategist at Commonwealth Bank of Australia. "As the last payroll shows, one report can be sufficient to move the policy debate to one side or another. So I think we still have to wait until the remaining data to print before making a strong case about a rate cut or an on hold decision." U.S. Treasury yields similarly fell on the heightened rate cut expectations, with the two-year yield last at 3.7371%, having swung in a range of nearly 10 basis points on Tuesday. The benchmark 10-year yield was little changed at 4.2965%. [US/] Also eroding investor confidence in the dollar were fresh attempts by Trump to undermine Fed independence, after White House spokeswoman Karoline Leavitt said on Tuesday that the U.S. president was considering a lawsuit against Fed Chair Jerome Powell in relation to his management of renovations at the central bank's Washington headquarters. Trump has been at loggerheads with Powell and has repeatedly lambasted the Fed Chair for not easing rates sooner. The president also hit out at Goldman Sachs CEO David Solomon, saying the bank had been wrong to predict U.S. tariffs would hurt the economy and questioned whether Solomon should lead the Wall Street institution. Elsewhere, sterling gained 0.03% to $1.3504. Britain's jobs market weakened again though wage growth stayed strong, according to data on Tuesday, underscoring why the Bank of England is so cautious about cutting interest rates. "(The) UK jobs figures pointed to the labour market remaining in fragile shape," said Michael Brown, senior research strategist at Pepperstone. "My base case still has the next 25bp cut pencilled in for November, though there is a long way to go, and a lot of data to come, before then." In other currencies, the Australian dollar dipped 0.05% to $0.6526, while the New Zealand dollar fell 0.03% to $0.5953. The Reserve Bank of Australia on Tuesday cut interest rates as expected, and signalled further policy easing might be needed to meet its inflation and employment goals as the economy lost some momentum.
Time of India
29 minutes ago
- Time of India
Auto parts makers gear up for profit squeeze
CHENNAI: What do the new tariffs by the US mean for India's auto component exporters? The math is complicated but the pinch is very real. According to auto analysts and industry experts, 15-20% of India's US-bound auto-component exports could be lost in the short term. The US is India's biggest exporting destination with 27% of auto parts exported there. Which means, says Jitin Makkar, group head & senior VP (corporate ratings) at ICRA, "around 8% of the Indian auto-component production will be impacted by the increase in tariffs". According to ACMA auto component exports to the US stood at nearly $7 billion in 2024. Of this, $3.6 billion - which covers parts and components for cars and small trucks - will attract 25% duty. But the real squeal will be in the balance $3-billion worth of exports that are part of a reciprocal tariff of 50%. This would include commercial vehicle parts, construction equipment components, off highway, tractor and farm equipment parts. While large OEMs are already looking at alternative markets, it is the sector mainstay MSME exporters that will hurt most. Take Noble Cast Comp, an aluminium casting manufacturer in Bhosari, that exports 60% of its products to the US. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Are you ready to conquer a planet? Undo The company's CMD Nitin Bhagwat said US customers were already demanding that they share the tariff burden, which would affect profit margins. Others like R K Industries in Pimpri Chinchwad exports computer numerical control machined components to global auto firms, with 20% going to the US. "Effects are expected to be felt from next month, with US customers likely seeking price reductions due to increased landing costs and clients may also explore alternative suppliers from countries with lower costs," said R K Industries's operations head Nilesh Khaire. While the effective duty can range anywhere from 25-28% to 45-50% depending on the different slabs, the pinch will differ on the basis of how sticky the product exported is. Ravindra Patki, managing partner at Vector Consulting Group said, "30-40% of India's auto component exports to the US comes from programmes in which India is one of multiple approved suppliers with a defined share of business." As for the larger exportable parts, Indian auto-component exporters will be at a disadvantage compared to other Asian countries like Japan, Vietnam and Indonesia which face a lower tariff of 15-19%. Component exporters however say a lot will depend upon their individual relationship with US-based buyers. Sipra Engineering MD M Umadi said, "US customers, accounting for 28-32% of exports, have assured support if we maintain cost, quality and delivery standards, but may request cost reductions later." Stay informed with the latest business news, updates on bank holidays , public holidays , current gold rate and silver price .
