• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Our Bureau

KOLKATA, Feb. 4

THE Life Insurance Corporation of India Ltd (LIC) has chalked out plans to expand overseas. It has, accordingly, decided to open new offices in Sri Lanka, UAE (likely in Dubai), Oman, Mauritius (which will also take in some of the African countries), Nepal and Oman. It has also planned to open offices in the US (New York and California) and the UK (which will gradually extend its reach toother European countries

As for investments in the domestic market, as part of a re-engineered business model, it plans to increase its exposure in both the equity and debt markets given its huge investible surplus.

The LIC Chairman, Mr G.N. Bajpai, said at an interactive session organised by the Indian Chamber of Commerce, here on Monday, that the corporation, which was poised to end the current financial year with a business growth of nearly 280 per cent (against 65 per cent in 2000-2001), was fully geared to meet the competition in the life insurance market.

"Accordingly, we have decided to go to the markets of the developed countries whose big players are now crowding the Indian scene. We plan to stay ahead of competition, and have taken up a major re-engineering of our business processes to speed up settlements, which are now at nearly 99 per cent," he said.

The chairman said plans had been drawn up to harness human capital in a big way, through continuous training of managers at all levels. "We have finalised medium-term strategic alliances, with virtually all the IIMs for this purpose," he added.

The plan is to capture 40 per cent of the country's insurable population of 300 million, and bring down fixed costs through adoption of right-sizing strategies.

Unveiling the strategic initiatives, he said the plan was to optimise the infrastructure available within the organisation, and emerge as a one-stop insurance shop. "We also intend to distribute customer procurement costs in an even manner to improve the bottomline," he said.

Describing the LIC brand as almost a sovereign one, he said plans had been drawn up to leverage the huge customer base through technology upgradation, including Web-enabling business at all its 2,500 offices.

On corporate investments, he said demand from the corporate sector had not really picked up. Credit offtake from industry was expected to pick up from the next fiscal, he said. On capital market investments, he said "volatility is an opportunity for us.''

Stating that LIC had an investible surplus of Rs 50,000 crore, he clarified that equity market investments to the extent of 8 per cent of this surplus would be handled by the investment committee that had been set up, and strictly according to policies clearly laid out. "At LIC, we have a highly systematic investments policy.''

On investments in the infrastructure side, especially roads and highways, Mr Bajpai said the corporation was likely to open a line of credit of nearly Rs 6,000 crore, and an agreement with the National Highways Authority was likely to be concluded soon.

According to the President of ICC, Mr A.V. Lodha, the purchase of insurance products was currently driven by forces of compulsion rather than by the choice of individuals and businesses.

"We need reforms in pensions and provident funds to allow for greater channelisation of these funds into productive streams, including infrastructure creation," he said.

Send this article to Friends by E-Mail

Stories in this Section
RBI Report on Currency and Finance, 2000-01 -- Policy-makers vs econometricians

Copyright © 2002, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line