Indian Life Insurance Corporation (LIC) has said that investment in its annuity products is continuously increasing. In such a situation, the company needs more long-term investment options according to its long-term liabilities. In this regard, the government insurance company is in talks with key regulators including the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI) and Insurance Regulatory and Development Authority (IRDAI).
What are annuity products?
Annuity products are retirement schemes offered by insurance companies that convert the deposited amount into regular and guaranteed income. LIC CEO and Managing Director R. Speaking to PTI, Duraiswami said that annuity products turn retirement funds into a guaranteed income over a long period of time. When someone invests a lump sum amount in it, LIC gives him pension for life.
LIC presented its suggestions to IRDAI, RBI and SEBI
He said that LIC has presented suggestions related to its needs to the insurance regulator IRDAI and also to regulators like RBI and SEBI. According to him, IRDAI is also taking proactive steps keeping in mind the changing needs of the market. Duraiswamy said insurance companies raise long-term funds, which are used to finance infra development and nation building projects. He said that the regulatory framework is also now evolving in line with these needs, which will benefit all parties.
LIC’s annuity business is quite big
The CEO said that LIC’s annuity business is very big and its liabilities are spread over 30, 40 to 50 years. Therefore, the investment strategy is also made keeping this long-term perspective in mind. When asked about value of new business (VNB) margins, Duraiswami said the company strives to maintain consistent improvement in VNB margins as well as gross VNB and all other key performance parameters. He said that LIC is focusing on providing products that provide better value to customers and suit their needs.
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