Daijiworld Media Network - Mumbai
Mumbai, Jun 7: State-owned Life Insurance Corporation of India is engaging with key financial regulators, including the Reserve Bank of India and the Securities and Exchange Board of India, to expand the availability of long-term investment instruments as demand for annuity products continues to grow, LIC CEO and Managing Director R Doraiswamy said.
Speaking in an interview, Doraiswamy said increasing inflows into annuity products require matching long-term investment opportunities because the insurer's liabilities often extend over several decades.
He noted that LIC has been communicating its requirements to regulators, including the Insurance Regulatory and Development Authority of India, which has been taking proactive steps to address the evolving needs of the insurance sector.
According to Doraiswamy, insurance companies generate long-term funds that play a crucial role in financing infrastructure projects and supporting nation-building activities. He said regulatory frameworks are gradually aligning with these requirements, creating benefits for both insurers and the broader economy.
LIC's annuity portfolio carries long-term obligations that can stretch over 30 to 50 years, making access to suitable long-duration investment instruments increasingly important.
On profitability, Doraiswamy said LIC aims to maintain or improve its Value of New Business (VNB) margin, which has remained above 20 per cent. He added that the corporation's focus remains on delivering value to policyholders while improving efficiency, increasing business volumes and expanding ticket sizes.
He said LIC intends to enhance margins through operational improvements and customer-centric product offerings that continue to attract policyholders.
Doraiswamy also revealed that LIC is actively exploring the possibility of establishing a fintech arm, either through strategic investments or by creating one organically, to support its growing digital transformation initiatives.
He said the insurer is already working closely with fintech and insurtech companies to develop innovative products and technology-driven solutions.
As a major financial institution, LIC is also evaluating strategic investments in specialised companies that could generate better returns for policyholders' funds, he added.
On the possibility of further stake dilution by the government, Doraiswamy said LIC has been prepared for such a move since its initial public offering in 2022.
He noted that any decision regarding the timing and extent of future stake sales would be taken by the government, and LIC would work closely with authorities to ensure a successful offering.
The government raised around ?21,000 crore through LIC's IPO in 2022 by diluting a 3.5 per cent stake in the insurance giant, which was previously wholly owned by the Centre.
Doraiswamy said the government remains committed to meeting listing requirements related to public shareholding and is awaiting favourable market conditions before proceeding with any further stake sale.