LIC Seeks More Long-Term Instruments as Annuity Inflows Surge

Life Insurance Corporation of India, the country's largest insurer, is in talks with financial regulators to widen the availability of long-term investment instruments as inflows into its annuity products keep rising. Chief Executive and Managing Director R Doraiswamy said LIC has been engaging with the Reserve Bank of India, the Securities and Exchange Board of India and the insurance regulator to communicate its needs. An annuity converts a lump sum or accumulated retirement corpus into a guaranteed stream of income for life, ensuring savers do not outlive their money. As more policyholders favour annuities, the insurer takes on very long-dated liabilities that must be matched with correspondingly long-term assets to manage risk. Doraiswamy said that with annuity markets becoming more popular, insurers need long-term investments that align with those long-term obligations, and that LIC's requirements are being conveyed to the relevant authorities. Expanding the pool of suitable instruments, such as longer-dated government and corporate bonds, would help insurers better match assets and liabilities, supporting the stability of retirement-income products in a fast-growing market.