Life Insurance Corporation of India is betting big on its bancassurance channel to collect Rs 5,000 crore new business premium this year. This will be around 4.3 times the Rs 1,100 crore collected by the insurance behemoth through the channel last year.

Its an ambitious target, but we know we can achieve it. We plan to develop the bancassurance channel so that it contributes 5 per cent to 10 per cent of our annual new business premium in future. This year, one of our channel partners (banks) has already promised to bring in close to Rs 1,000 crore, LIC managing director A K Dasgupta said.

Responding to a query on LIC penetration via the bancassurance channel, Dasgupta said many of the 21 crore LIC customers (who contribute 30 crore policies) have bank accounts, but there is an opportunity to sell more polices.

LIC, which signed a MoU with Vijaya Bank on Thursday for distribution of its products, now has nine public sector banks apart from around 100 other financial entities, which include regional rural banks and cooperative banks.

Vijaya Bank chairman and managing director Albert Tauro said his bank aimed to contribute 15 per cent of LICs total premium to be generated through the bancassurance channel in this financial year.

LIC sold 3.8 crore policies last year and has assets worth Rs 1,200,000 crore under its management, said A K Sahoo, executive director (bancassurance and alternate channels) of LIC.

We begun humbly in 2001-02. But today, we have garnered enough momentum in this route as banks and LIC both enjoy a profitable proposition, Sahoo added.

Speaking on the Irda-Sebi tussle over the unit-linked plans (Ulips), Dasgupta maintained that he expects Irda to come out with fresh announcements on the issue and some of the Ulips may require little bit of restructuring.