LIC may get 'smarter' with digital transformation, says DIPAM Secretary Pandey

The share price of Life Insurance Corporation of India (LIC) crossed its issue price for the first time on January 30.

The digital transformation of Life Insurance Corporation of India (LIC) could "really spur... (it) into becoming a very smart organisation", Tuhin Kanta Pandey, secretary to the Department of Investment and Public Asset Management, has said.

In an interview to Moneycontrol after the presentation of the Interim Budget 2024-25, Pandey said LIC is "improving very fast on all fronts" and working hard to retain its market share in a profitable manner. This includes closing some products, even if they were high growth, and issuing a number of non-par products.

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"They have launched a digital transformation project. BCG has been hired," he added.

When asked if these changes meant the insurance behemoth is far more valuable than what the current share price indicates, Pandey refused to comment.

"We being promoters, we should not be really saying these things. I am only saying that you see the progress. We are making it (LIC) market oriented. Market is realising that," he said.

"This digital transformation is a very important project for LIC. And I think that will really spur the LIC into becoming a very smart organisation. Their HR also needs to be looked at; they are looking at it," he added.

Listed on the bourses in May 2022, LIC's shares crossed the issue price for the first time on January 30 and closed at Rs 945.45 on the National Stock Exchange on February 2.

Pandey said the journey with LIC is going to be a "long" one considering that even to think of listing its was "mentally a big leap forward". Since its listing – which fetched the government more than Rs 20,000 crore – the insurance company has taken "several leaps forward internally", Pandey said, including a new actuarial software.

"This itself was such a feat – that kind of quantitative work, reconciliation, external reporting actuary, reporting of embedded value for the first time. In fact, I am still not very satisfied that there is little talk of embedded value. It's such an important indicator in insurance companies. So, embedded value has grown," Pandey said.

Asked to comment on some of the divestment of IDBI Bank, the secretary expressed confidence about it being completed in 2024-25. As for Bharat Petroleum Corporation Ltd, the re-launching of the transaction seems some distance away.

"BPCL we have not really re-launched the transaction yet," Pandey said. "Even now, energy markets are dicey. Suddenly there's a Red Sea issue now. So, the government has to make up its mind. The Ministry of Petroleum is also an important interlocutor there. When that is decided, EoI (Expression of Interest) will be launched."