Articles

Certainly.

Consider a few facts - the corporation has been investing Rs 400-500 crore every month in the stock markets in selected stocks. Also the corporation has invested 50 per cent of its funds in government securities and 15 per cent in infrastructure sector. All this will translate into a sturdy income base for LIC, the proceeds of which will be transferred to its policyholders from time to time.

LIC's returns on its property portfolio, which has a book value of around Rs 1,000 crore, is around five-six per cent - an additional income base.

Also being an established company its costs are not as high as private insurers. While private insurers need to spend a substantial amount of money on creating brand awareness, LIC has high brand recall already. In short LIC is synonymous to life insurance.