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Insurance

Information about LIC is taking steps to change corporate governance: DIPAM secretary available for investment. Back
LIC is taking steps to change corporate governance: DIPAM secretary
14-Sep-22   21:58 Hrs IST


The management of Life Insurance Corporation of India (LIC) is taking several initiatives to transform the corporate governance of India's largest insurance company, such as improving persistency ratio, hiring professionals and boosting employee productivity, according to the Department of Investment and Public Asset Management (Dipam) Secretary Tuhin Kanda Pandey.

A lot of teamwork was put into the listing of LIC that required a series of legal changes, among others, and now the management of the insurer is taking post-listing initiatives that involve addressing corporate governance challenges, said Pandey.

"LIC is taking a number of initiatives. It's important from the point of view on whether the LIC IPO was the only objective, or are we really looking at.. corporate governance transformation," Pandey said at FICCI Annual Capital Market Conference.

Some of these measures include improving LIC's 13th month and 25th persistency ratio, which is lower than its peers. Persistency ratio denotes life insurance policies receiving timely premiums during the year, and the number of net active policies. It is measured for one financial year or a combination of financial years. The first year's persistency ratio is estimated in the first month of the next year.

Other moves include bringing new professionals to look at investor relations, hiring a chief development officer and a chief technical officer, Pandey said.

The insurer is also improving employee productivity, cash management, looking into actuarial valuation in line with industrial practice, and regular disclosure of embedded value, he added.

LIC has also announced it will disclose its September EV with quarterly results.

At a time when India is looking at more capital formation to push growth, there is need to unshackle investment opportunities, said Pandey.

One such investment opportunity is in brownfield projects where such units can be utilised to reach economic growth potential, create jobs through structural reforms, and put India on a sustainable high growth path, Pandey said.

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