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Our Bureau

Chennai , Jan. 25

LIFE Insurance Corporation of India (LIC) hopes to offer insurance products in Saudi Arabia in joint venture with Al Hokair, an insurance group there, according to LIC's Chairman, Mr R.N. Bhardwaj.

Addressing newspersons after inaugurating an office building for LIC here on Tuesday, Mr Bhardwaj said that expanding international operations to exploit the large NRI base is one of the four business strategies the corporation has identified. The other areas are leveraging real estate, new distribution channels for marketing insurance products and pension group and super annuity schemes.

LIC is also investing in information and communication technology to upgrade its service delivery and operations. It recently switched over to Linux platform and in 2004-05 invested over Rs 75 crore in information technology infrastructure. It has roped in Wipro and Teradata for a data-mining project. The outcome of this study would help LIC put together new products, he said.

The joint venture in Saudi Arabia, the agreement for which was signed on December 20, 2004, also includes New India Assurance and LIC International. It is looking at joint ventures in Dubai, Sri Lanka and Nepal. It would need between Rs 50 crore and Rs 100 crore capital for each country it hopes to enter, he said.

LIC also has branches in London, Mauritius and Fiji.

LIC is among the largest landowners, and its real estate holdings are second only to that of the railways. In 2003-04, its rental income was about Rs 115 crore, which was a 15 per cent growth over the previous year. It is renegotiating rents in the older buildings that it owns, and the growth trend will continue, he said.

It is also looking at alternate channels for distributing insurance products. It has tied up with banks, which would market insurance policies.

In his inaugural address, Mr Bhardwaj said that LIC has tied up with more than 30 banks that together have over 10,000 branches for selling the policies. More such agreements are in the pipeline. It is looking at using the Internet and brokerage houses as new marketing routes.

Group insurance is another business niche that LIC has identified as a major growth area. It roped in NGOs to sell these products, and in 2003-04 its contribution to premium income was about Rs 3,600 crore, which was double that of the previous year. In the current year, it is set to grow by 50 per cent, he said.

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