As competition arrives, LIC now plans to focus on customers

As competition arrives, LIC now plans to focus on customers
ENS ECONOMIC BUREAU

MUMBAI, NOV 3: The entry of private players has started changing the insurance business. Life Insurance Corporation (LIC), which monopolised the life insurance sector till last month, has finally discovered that it has customers. After over a 40-year delay, LIC chairman G N Bajpai says the focus of Corporation will be to understand customer's needs and fulfill the needs with the help of technology and personalised services.

In a rare news conference organised here today, Bajpai said competition in life insurance sector will expand the entire market with LIC continuing its 30 per cent growth figures for the next three years. ``Customers will be our focus as we will launch several new products, add value to our services by offering health insurance,'' he said.

That the Corporation has been continuously rapped in the knuckles by customers surveys for shoddy services is something which worries the present management. Hence, the discovery of customers. The Corporation, which has built up an asset base of a staggering Rs 160,000 crore -- thanks to government protected leadership -- wants to be "six months ahead of competition" by offering services from new distribution channels like banks, corporates and direct marketing.

``We are in talks with some private and rural banks banks to utilise their payment gateway facility and branches to distribute our products,'' Bajpai said. ``Direct marketing will help us to cut costs and reach the customers directly,'' he added.

With the country's first private sector life insurance policy set to be issued by HDFC-Standard Life next month, LIC has established an in-house committee for a complete ``business process re-engineering'' to look after the needs of its 11 crore policy holders. ``Our goals is to be pro-active... not reactive to the competition,'' the Chairman says.

For a Corporation whose survival now depends upon its neglected customers reflects how competition can shake up a dinosaur to either turn into a tiger -- or perish. ``We are even looking into the possibility of a customer paying his premiums though the internet,'' Bajpai said. ``LIC is changing. Thanks to computerisation in all the metro city branches, a customer can pay his premium from any branch in that city. We plan to extend the same services to another 41 cities,'' the Chairman added.

Bajpai was confident that LIC would be able to meet the challenge based on its human resources, its large agent base of 8.5 lakh and technical upgradation of their services. ``We don't intend to downsize our staff strength and instead will make full use of them so that we can match the 30 per cent growth of the entire industry,'' he said.

In computerisation alone, the institution has so far invested about Rs 140 crore expanding the wide area network and metro area network to even Doda and Andaman and Nicobar islands. ``We are the largest player in the Indian life insurance market and we will continue to remain so,'' the chairman hoped.

Rs 40,000 cr investments planned

MUMBAI:For the first seven months of the current fiscal, LIC has invested Rs 20,654 crore in the capital and debt markets, including government securities. ``We have earmarked Rs 40,000 crore for investments in the current fiscal alone in the financial markets,'' LIC chairman G N Bajpai said.

LIC invested around Rs 2,200 crore in equities as on October 31, a hike of 20 per cent over last year. The net non-performing assets (NPAs) of the insurance major stood at 2.28 per cent, which works out to Rs 890 crore.

Besides, it plans an investment of Rs 6,000 crore in the infrastructure and social sectors. Of this only Rs 1,700 crore has been spent so far and the demand is likely to go up during the last quarter.

In the half year ending September 30, the number of individual assurance policies rose by 21.71 per cent to 65.58 lakh and the sum assured increased by 33.57 per cent to Rs 36,150.64 crore over the same half year period last year. First premium income increased by 36 per cent to Rs 1,141.04 crore.