State owned Life Insurance Corporation(LIC) has generated a total valuation surplus of Rs. 48,444.82 crore, during the FY 2017-18, registering a growth of 10.1 per cent over the previous year.
After distributing 95 per cent of the surplus to policyholders as bonuses, the balance of 5 per cent amounting to Rs 2,430.19 crore is the share of the Government.
Going by the LIC Act 1956, the corporation doesn't have a concept of profit and its `valuation surplus',which is the net profit of the corporation, is distributed between the central government and policy holders in the ratio of 5:95.
The life insurance behemoth had an annual income of Rs 5.23 lakh crore and achieved the highest ever first Year premium income of Rs 1,34,551.68 crore in the year 2017-2018. The corporation now manages assets worth more than Rs 28.45 lakh crore.
LIC had ended FY 2017-18 with a total premium, including renewals,close to Rs 3,17.000 crores. The total investment income of the corporation stands at Rs 1,97,000 crore.
During 2017-18, the corporation has invested Rs 2.62 lac crores in Central and State Government Securities with an average annualised yield of 7.63 per cent. An investment of Rs 37,824 crore was made in corporate bonds at a yield of 7.80 per cent and an investment of Rs 88980 crore was made in equities .It had realised a profit of Rs 25,646.62 by sale of equity and has generated an investible surplus of Rs 3,68.660 crores.
“The investment department continues to strive to deliver better returns on the portfolio with safety first objective.However one area of concern for the corporation is that while the total benefits paid out grew by nearly 18 per cent to about Rs 1,97,600 crores, the total income at nearly 5, 14.000 crore grew’’ sources said.
During the year 2017-18, LIC has settled claims to over 2 Crore 66 lakh claimants for an amount of Rs 1.11 lakh crore.
V K Sharma, chairman, LIC, on Friday presented the cheque of Rs 2,430.19 crore to finance minister Arun Jaitley, as the Government of India’s share of the surplus arising out of the LIC’s actuarial valuation as at 31.3.2018.
P Radhakrishnan, Minister of State for Finance and Shipping, Girish Chandra Murmu, Special Secretary, Department of Revenue, Debasish Panda, Additional Secretary, DFS were present along with officials from the LIC , Hemant Bhargava, MD, B Venugopal, MD and Sunita Sharma, MD.
LIC has completed 62 years since its incorporation and had a market share of 75.67 per cent in number of policies as on 31st March, 2018.
“LIC has achieved a cult status as far as life insurance is concerned. Now I dream of a day when LIC of india will acquire a similar status as a global conglomerate. This is my ultimate vision for LIC @ 75… A place where all kinds of people, with all kind of needs and in all kinds of places: are served under just one roof…that of LIC of india…and they need not go anywhere else, ever,'' said chairman Sharma.