LIC's FY08 profit up 10%

Public sector insurer Life Insurance Corporation of India (LIC) has generated Rs 16,600-crore valuation surplus, or profit, in 2007-08, a 10 per cent rise over 2006-07 figures, sources familiar with the development said.

A formal announcement is expected soon. Of this, the insurance behemoth will pay 5 per cent, or Rs 830 crore, to the government as dividend and will distribute the balance among its policy-holders as bonus.
In the previous year, the dividend was Rs 760 crore. Private insurers pay 10 per cent of their valuation surplus to shareholders. Though LIC is yet to arrive at a figure regarding the bonus, “It will not be less than last year’s,” a source said.
In 2006-07, LIC had declared a bonus of Rs 70 rupees per Rs 1,000 sum assured. In 2007-08, LIC’s solvency margin has also increased to 152 per cent or Rs 42,250 crore as compared with 150 per cent in the previous financial year.
New business premium stood at around Rs 58,000 crore. LIC is aiming for a 30 per cent increase in its new business premium in 2008-09.

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LIC Starts e-Documentation

Life Insurance Corporation (LIC), one of the largest insurance organizations in the country with more than 180 million customers, has started a process of electronic document management. The project, to be completed by 2010, will enable policy holders with multiple options for instant e-services. As the electronic implementation of policy documents gets underway, LIC is all set to facilitate more than 180 million existing customers with an array of services. The policy documents will be made available online and consumers can avail medical, loan, and claim facilities irrespective of geography. As it transforms more than 180 million policy documents into electronic format, the process will enable the organization to turn paperless. LIC, is investing nearly Rs. 600 crore on electronic document management system (EDMS) that will enable it to digitalize all the policy documents by 2010.
The service will help policyholders to make informed decisions for various queries and changes, including verification of signatures, without being physically present at the place of policy allocation. This is being deemed as one of the biggest projects of its kind. "It is a good move and the policyholders will be able to access services and file requests through any branch that will eventually save time and money," said Dhirendra Pratap Singh, an executive at LIC. LIC introduced basic computing in 1964, which was replaced by Microprocessors-based computers in branch and divisional offices for back office operations in 1980s'. In addition, the organization commenced standardization of hardware and software in 1990's. Today, it maintains nearly 2100 fully-computerized branch offices, as well as more than 100 divisional and eight zonal offices. Insurance industry experts said that once the project goes live, there will be an instant monetary savings in transaction cost, as well as help in reduction of process-management time that will benefit both- organization and policyholders. The service will also help customers to access insurance documents instantly and can apply online for educational, personal and home loans. In addition, the customers can visit any branch office in order to make; modifications in the nomination status and address; and related queries. The organization had already introduced satellite offices which allows its customers to pay insurance premium anywhere in India in 2005. Rakesh Kumar, senior manager with LIC, Delhi said that the process is underway but however, he refused to divulge details.