Give me more: Pranab tells LIC

MUMBAI: Finance Minister Pranab Mukherjee has asked Life Insurance Corporation to increase its contribution to the GDP to 2 per cent from the present 1.84 per cent, as the state-run insurance behemoth enters its 55th year of operations today.

The life major enjoyed a whopping 71.33 per cent of new business premiums as of July 31, 2010, and 71.68 per cent in terms of overall policies, according to data from insurance regulator Irda.

In the overall life market, LIC had a 66 per cent market share as of end-June, a full 11 per cent jump in comparison to the same period last year. LIC was created on September 1, 1956, by nationalising 245 private insurers through an Act of Parliament.

Even after a decade of operations, the 22 private operators together have a market share of slightly above 29 per cent, Mukherjee noted and said he expects LIC to increase its contribution to 2 per cent of GDP from the present 1.84 per cent.

The corporation has already registered over 1 crore new policies in the current fiscal (as of August 14), with a first-year premium income of Rs 15,917 crore, translating into an impressive 96.17 per cent growth, said corporation chairman T S Vijayan.

Inaugurating the week-long anniversary celebrations of LIC by cutting a ceremonial cake at the insurance meet organised by Assocham, Mukherjee extended his best wishes to the corporation and noted that opening up of the market has only pushed LIC to newer heights in terms of business and service to customers.

Mukherjee also asked insurers to introduce more affordable products to help the government extend its financial inclusion drive to the masses, reduce the premiums and increase the visibility of different policies and products through the print and electronic media, seminars and discussions.

When LIC began operations on September 1, 1956, it had assets worth only Rs 348.68 crore and the same has now risen to a mammoth Rs 11,52,057 crore, said Vijayan. Total premium income for FY'10 stood at Rs 1,85,986 crore, while gross total income stood at Rs 2,98,721 crore during the same period. In 2009-10, the corporation settled 2.11 crore claims amounting to Rs 53,954 crore.

The corporation has 2,048 branch offices, 1,042 satellite offices, an employee force of 1,15,000 and over 14 lakh agents servicing over 37 crore individual policies and over 8 crore group and social sector policies, Vijayan said.