LIC targeting double digit growth, plans to launch 3-4 new products for FY24: Chairman Siddhartha Mohanty

Insurance behemoth Life Insurance Corporation (LIC) is set to unveil 3-4 new products in the upcoming months, aiming a double-digit increase in new business premiums during the current fiscal year.

"We are projecting double-digit growth over the last year. We are going to achieve that because a recent trend is showing an uptick in individual retail business. In order to further reinforce our commitment, we are going to launch some new attractive products," LIC Chairman Siddhartha Mohanty told PTI in an interview.

LIC plans to unveil a new product in early December, with the anticipation that it will generate significant interest in the market, he said.

Mohanty highlighted several key attributes of the latest product, emphasizing its commitment to delivering guaranteed returns. According to him, policyholders can expect a lifelong benefit of 10 percent of the sum assured after the policy matures.

Expressing confidence, Mohanty asserted that the new product is poised to disrupt the market. He emphasized the widespread interest in understanding the transparent cost structure and anticipated returns over a period of 20-25 years.

Furthermore, he mentioned that the new product will include features such as a loan facility and the option for premature withdrawal. Mohanty underscored the significance of guaranteed return products, stating that they serve the interests of both policyholders and shareholders. Notably, he pointed out that a substantial number of shareholders are also policyholders. "So, it is dual benefit for policyholders," he added.

Mohanty further added that 2-3 additional policies will be introduced throughout the year to attain a double-digit growth in new business premiums. In the initial half of the ongoing financial year, LIC's new business premium income in the individual segment saw a 2.65% increase, reaching ₹25,184 crore compared to ₹24,535 crore in the corresponding period last year.

New business premium refers to the insurance premium payable in the initial policy year of a life insurance contract or a single lump sum payment from the policyholder. This metric serves as an indicator of the new business underwritten by a life insurer.

According to IRDAI's measurement of market share based on first-year premium income, LIC remains the dominant market leader in the life insurance sector, boasting an overall market share of 58.50%.

As of September 30, 2023, LIC held a dominant market share of 40.35% in individual business and 70.26% in group business for the preceding six months. During this period, the Assets Under Management (AUM) of the insurance giant rose to ₹47,43,389 crore, exhibiting a 10.47% increase from ₹42,93,778 crore recorded a year earlier. 

In terms of financial performance, the overall expense ratio for the first half of the current fiscal year stood at 15.14%, reflecting a decrease from the 16.69% reported in the corresponding period of the previous year.