Press Trust Of India / New Delhi Feb 10, 2009, 00:26 IST
Undeterred by the contraction in the insurance industry in recent months, state-owned Life Insurance Corporation (LIC) is targeting a business of over Rs 3,00,000 crore by 2011-12.
“Our premium growth over the period has been over 20 per cent each. This year we are targeting Rs 1,75,000 crore (total premium). At 20 per cent, in three years, it will increase to Rs 3,00,000 crore,” LIC Chairman T S Vijayan said.
“Anything more than Rs 3,00,000 crore after three years would be a bonus for us,” he said. With the Rs 1,75,000 crore total premium by the end of current financial year, the life insurance giant is looking at a market share of about 75 per cent.
Talking about new business target for this year, Vijayan said the insurer expects to earn first year premium of Rs 57,000 crore even when the private sector insurers are uncertain about meeting the targets due to economic slowdown.
“I would still believe that we should get Rs 57,000 crore. LIC is not in a habit of revising target mid-way,” he said.
Vijayan said, “In the first quarter, our market share went down to 49 per cent then brought some new products ... We have taken corrective steps for it. I think we will be able to get that. So, going forward we are looking at 60 per cent.”
Last year, LIC collected first premium of Rs 43,800 crore and commanded a market share of 63 per cent. However, the market share of LIC declined to 55 per cent in November 2008, with first premium collection at Rs 25,220.62 crore. On the decline in the market share, Vijayan said, “Ulips had overtaken all other policies till March (2008). When we analysed the portfolio in the month of March, we thought that this is not the right way of selling insurance in a country like India.”
So, for the first three months, LIC did not bring replacement product, he said, adding that on top of it, the company withdrew some product in March without introducing replacements in the market.
“That had created a big vacuum. The absence of the product in the right market,” he said.
“May be it was conscious decision. It was felt that top line would go up but what we are sacrificing is something else. We wanted to push other things,” he added.
It is wonderful to hear our chairman give such powerful statements of doing something that no other Chairman of LIC has done before. But sadly he doesnot realise the problems faced by the core marketing team of LIC i.e the Agents and Development Officers. We are like soldiers fighting a constant battle without any ammunition provided by the king. Yes, its like buying you own ammunition to fight for the king. We as Agents and Development Officers have to buy our own laptops, computers, printer, stationery items, vehicles, office equipments on our own. Even the software required to run the LIC program has to be purchased by us. Competition prizes are announced but are never distributed for atleast a year.
Sir, we wish to ask you through this platform " TILL WHEN WILL WE HAVE TO SUFFER ?
Posted by: Mehul
February 22 , 2009, 19:20 IST
Yes, this is the sad reality that we sales people have to face while dealing with policyholders. No facilities are provided by LIC. Even when policyholders ask for yearly diaries or calenders, we have to purchase them from LIC at a price of Rs.49 each and then give to our policyholders while the branch managers distribute it freely to their friends and relatives. These managers also get a laptop but none of them know to operate it, so most of them keep it at home. When will LIC wake up to the problems faced by the sales force ? The chairman is taking credit for the success that actually belongs to the agents of LIC.
I agree with you Mr Kumbhar. There is no substance in the kind of business that LIC has been doing in the last 4 years. In order to show a higher premium than private insurers, LIC is selling Single Premium plans. There is no increase in renewal premium of LIC instead there was a report that surrender of policies have increased alarmingly. The LIC Management has to be held responsible for this dangerous business trend which may put LIC in the same position as that of UTI.
Yes the optimism to collect Rs 3,00,000 cr premium by march 2012 is welcome but how it can be done is a question ? As of today renewal premium stands at just above Rs.125000 crore and non single plans are selling with first premium at around Rs 15000 crore with negative growth year by year which is main source to grow renewal premium by 2012.Also ULIPs sold over last few years will stop giving renewal from 2010 reducing renewal again. Can this be achieved by single premium plans ? One more confession from LIC is that ULIPs were not the right plans for LIC and Indian customers .The main marketing class of LIC Development Officers were pleading the same point not to go for ULIPs in hurried manner but LIC turned deaf ear to them. Can LIC understand the same problem with ASTHA and other single premium plans , go for regular plans now , and listen to Dos and agents class aspirations .
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