LIC Plans to Change its Investment Strategy

Life Insurance Co Ltd. India (LIC), which has often intervened and stressed lenders to bail out government divestment programs, faces stricter scrutiny as the country's largest insurer as a listed company. Therefore, we plan to avoid excessive investment risk and strengthen corporate governance.

India's largest institutional investor, the state-owned insurance giant, plans to change its investment strategy and strengthen its materiality policy on related party transactions, calling for two people close to LIC not to be identified. It has equity investments worth more than Rs 10 trillion, while its total assets under management are valued at around Rs 41 trillion.

According to the Insurance Regulatory Development Authority of India (Irdai), life insurers use at least 50% of their investable surplus in government bonds, at least 15% in infrastructure-related assets, and the remaining 35% in equities, non-convertible debentures, mutual funds, and certificates of deposits, among other assets.

LIC also plans to cut its holdings in its subsidiaries, including LIC Housing Finance Ltd, and LIC Mutual Fund Asset Management Co. Ltd and IDBI Bank, according to sources. 

In the prospects, LIC does not currently centralize creditor-related details and the amount payable to each creditor, so insurers are exempt from Sebi's licensing requirements to disclose the number of consolidated creditors.