LIC cashes in on low stock prices

Taking advantage of the recent fall in the market, India’s largest life insurer Life Insurance Corporation of India (LIC) has stepped up its investment in the domestic equity markets during the current financial year, pumping in over Rs 53,000 crore, which is 35.89 per cent higher than what it had invested during the whole of FY15.

While speaking to reporters on the sidelines of the launch of LIC’s e-services, S.K. Roy, managing director of LIC, said that the correction in the equity market had given it an opportunity to incre-ase its investment in equities and the state-owned life insurer has invested heavily in IT, pharma and FMCG sectors over the last few months.

During FY15, LIC had made a net investment of Rs 39,000 crore. “The fall in the market has given us an opportunity to remain net buyers in FY16. Sectors like IT, pharma and FMCG are the three areas where LIC has remained fairly active during the last couple of months,” he added.

Mr Roy also informed that LIC has invested Rs 1.5 lakh crore in government securities in FY16 till date. Asked whether LIC is concerned about its investment in public sector banks, which are grappling with the issues of rising non-performing assets, Mr Roy said, “There is a general concern about the rising bad assets in the banking system. We have participated in a number of bond issuances by public sector banks. We consider each issuance on a case-by-case basis after doing a proper due diligence of the respective issuer. So we are not that much concerned about our investment in PSBs”.

Looking ahead, Mr Roy also said that LIC would be focusing more on e-insurance from FY17 onwards. However, he dispelled fears about insurance agents losing their business stating that there is enough space for both online and offline channels to grow in India.

“In FY16, we sold 1.5 crore insurance policies out of which only 6,000 policies were sold online. So there is no need for our agents to grow anxious,” he added.