January - March 2015

Pioneer Remains The Leader

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Despite stiff competition from private players in the insurance space, the Life Insurance Corporation of India has been a market leader for the last 58 years, asserts S K Roy, Chairman, Life Insurance Corporation of India, in an interaction with Kartik Sharma of Elets News Network (ENN)

S K Roy

S K Roy
Chairman, Life Insurance
Corporation of India

Give us an overview of LIC’s operations.

The Life Insurance Corporation of India came into being on September 1, 1956 with the objective to serve the individual as well as the state. A solemn vow was taken and captured by the motto ”Yogakshemam Vahamyam”, meaning “Your welfare is my responsibility.” For the past 58 years, LIC has been playing a significant role in spreading life insurance widely across the country.

LIC is the largest insurer in the country, with over 30 crore live policies and an asset base of around `18 lakh crore. Despite a stiff competition in the insurance space, the LIC of India retained its market share of 75.33 percent in premium and 84.44 percent in NOP in New Business in 2013-14. Today, LIC serves its customers through eight zonal offices, 113 divisional offices, 2,048 branches, 1,346 satellite offices and 1,242 mini offices, with more than 1,20,388 lakh employees and 11,95,916 lakh agents.

Besides life insurance, through its various subsidiaries, it is also involved in providing various financial services, including Pension (LIC Pension Fund Ltd.), Housing Finance (LIC HFL Ltd), Mutual Fund (LIC Nomura MF), etc. It also provides insurance services in several countries abroad through its branch offices, joint ventures and wholly-owned subsidiaries.

LIC has always been in the forefront of financial inclusion and empowerment initiatives of the Government of India. Under our micro insurance channel, we have already covered more than 1.78 crore policy holders in the last eight years

Please shed light on the initiatives being undertaken by LIC in terms of providing life insurance to financially excluded people.

LIC’s Vision 2020 envisages covering all the insurable population of our country by 2020. This is an initiative undertaken by LIC spreading life insurance to the farthest corner of our country.

We have opened 1,242 mini offices, so as to make our presence felt in hitherto unrepresented areas and reach out to all insurable population of the country. As per the regulatory requirements, we have introduced some new products which have been well received in the market. Some more products are in the pipeline. Once these are also introduced, our customers will have a wider basket of products to choose from.

The Ministry of Finance has envisaged a two-phase rollout of the financial inclusion programme. In the first phase, universal access to banking facilities will be provided to every household. In the second phase, a Credit Guarantee Fund will be created and penetration of micro insurance and ‘Swavalamban’ will be enhanced.

The Pradhan Mantri Jan Dhan Yojana (PMJDY) is a very effective medium to reach the masses. The scheme has been started with a target to provide ‘universal access to banking facilities’ starting with ‘Basic Banking Accounts’ with overdraft facility of `5,000 after six months and RuPay Card with inbuilt accident insurance cover of `1 lakh and RuPay Kisan Card. There is also an inbuilt life insurance cover of `30,000 for one person in the family, which is being administered by LIC.

LIC has always been in the forefront of financial inclusion and empowerment initiatives of the Government of India. Under our micro insurance channel, we have already covered more than 1.78 crore policy holders in the last eight years. We have set a target of 24 lakh micro insurance policies for 2014-15. We also plan to recruit at least 750 agents under this channel to deepen our penetration in the semi-urban and rural areas.

How is your organisation leveraging technology for providing better services to the clients?

As a strategic move, we had launched our first online product in May 2012, as today’s young and tech savvy executives are looking for easy access to make purchases online. The second online policy, which is a purely term assurance policy, was launched in May 2014. We have, in a span of eight months, achieved 5,373 e-term policies.

We are always in the forefront to provide the benefit of latest technology to our customers. We have already digitalised more than 30 crore policy records through our Enterprise Document Management System. With this initiative, records of our policies can be accessed all over India to provide services to the policyholders. Also, many of the services of LIC are available through SMS. Policyholders, who are registered in our Customer Portal on our website, receive premium intimations, loan quotations and other services through SMS. Premium payment facilities with Debit/Credit card and internet banking is also available on the online platform.

As a strategic move, we had launched our first online product in May 2012, as today’s young and tech savvy executives are looking for easy access to make purchases online

You have been a leader in this space. Please share your vision about the future of insurance industry in India and the go-to-market strategy of LIC.

Being the largest life insurance company in India, LIC strives to introduce a variety of products, so as to cater to the evolving needs of the society. We provide products for different business segments, such as pension and group insurance, individual life insurance, health insurance, micro insurance and products for online business. We would like to be present in the space for different customer segments, such as plans for children, high net worth customers, etc., under the individual business and some niche products under the group segment.

In the light of customer-oriented market conditions and also with a vision to provide financial inclusion to the rural masses and to pool their resources into the nation building process, there is a need to sensitise the workforce towards these issues. Technology plays an important role in providing customer service today, particularly because of the large volumes we handle. Workforce needs to be trained to adapt to the changes and upgradation in technology to meet the rising customer aspirations.

We are seeing a growth in the economy in the current fiscal. It is a slow moving uptrend. So, the life insurance industry will continue to perform well and the initiatives taken by the insurers and the Regulator will go a long way in increasing the insurance penetration and density in India. LIC is a market leader and, hence, we will definitely benefit from the growth of the economy. We will claim our stake in the growth trajectory for sure.

The challenge for LIC is to continue on track with the happenings and the developments in the financial market and changes in customer’s profile and preferences. But we have our systems in place — best technology and a dedicated workforce to meet these challenges. We are exploring all segments and markets and upgrading the resources constantly to flow with the tide.

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