Adani Group: LIC chief: No loss in Adani investments

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MUMBAI: Life Insurance Corporation saw an upswing on Friday after the company reported an increase in quarterly profits and said it is focused on improving margins. In an interview with TOI, LIC chairperson Siddhartha Mohanty spoke on its investment strategy and what is in store for shareholders. Excerpts:

The PM mentioned LIC’s growing strength. What plans do you have for IPO investors who bought at a higher price?
The PM’s appreciation is a shot in the arm for LIC. I am grateful for the confidence he has reposed, reinforcing our commitment to creating superior value for all stakeholders. We’ve previously increased dividends by 100%. Our objective is to maximise profitability for shareholders. Given the growth in July and August, we anticipate our business to be in line with industry as our recently launched products gain momentum in the coming months.

You mentioned a shift towards profitable products. Will you require more professional agents to sell them?
There has been a change in our product mix approach after listing. The proportion of higher-margin non-participating products has increased to 10.2% from 7.8%. Both term insurance and unit-linked insurance policies fall under non-participating products. Our agent training approach doesn’t focus on promoting non-participating products but on providing customers with comprehensive information about available options. Customers with a higher risk appetite can opt for market-linked products. We’ve introduced a term policy named Jeevan Kiran with a return of premium feature, which has been well-received. Expect more product innovation in the future, aiming to strengthen agency forces and increase the number of professional agents.
LIC’s share price faced turbulence due to the Hindenburg report on the Adani group… Could you provide an update on the exposure?
We can’t discuss individual companies, but we have never made a loss in our investments in the group, with market value significantly exceeding book value. Our investments adhere to strict regulations and internal protocols.
How has digitisation progressed at LIC?
Although the share of products directly sold through digital channels is less than 1%, we’re digitising customer onboarding, whether facilitated by agents or banks. We’re upgrading our agent app and integrating systems with bank partners. By December-January, customer onboarding will largely happen digitally. Our digital transformation project targets 90-95% paperless operations, following a time-bound implementation plan.
LIC traditionally adopted a contrarian investment approach. Is this strategy unchanged?
Our investment decisions aim to create optimal value for stakeholders. We buy during market declines and secure profits during upswings. But the approach cannot be generalised as contrarian as we also base our choices on the underlying value of the stock as well as the market momentum.
LIC had a non-life division before nationalisation. Are you considering a non-life license for health insurance?
We already offer fixed-benefit health insurance. Regarding composite licensing, our board will decide based on stakeholder benefit when the opportunity arises.
Will you unlock investments’ value this year? Do you foresee IDBI Bank sale?
The government will decide on IDBI Bank’s sale. As IDBI Bank is our significant bancassurance partner, we want to retain a strategic investment for continued partnership.