From Oct, new biz premium has been positive: Usha Sangwan

Interview with Managing Director, LIC

Life Insurance Corporation of India (LIC) has made a good number of contra bets in the equity market, benefiting handsomely. Usha Sangwan, managing director, talks about the returns and how November will begin their turnaround in the new premium business. Edited excerpts of a talk with M Saraswathy:

LIC's premium growth has seen a dip. Do you believe the figures will see a rise from this month?

The pace is picking up. We have come out with three new products which are very well accepted in the market -- Jeevan Shagun, Jeevan Rakshak and Varishta Pension Bima Yojana. In less than two months, sales have picked up. In Jeevan Shagun, we have collected Rs 800 crore, Varishta Pension Bima Yojana another Rs 800 crore and in Jeevan Rakshak we have done 12 lakh (1.2 million) policies. The momentum is already there. We believe November should show good growth.

Is there a concern about the drop in new premiums in the first half of this financial year?

From October, new business premium has been positive. November will bring a good turnaround. Also, it will be good from the January quarter and we are gearing up for it.

You have an online portfolio. How has it performed and is there scope to have it as a big part of your business?

We have Jeevan Akshay-VI, an immediate annuity plan online. Further, we have launched an E-Term plan but haven't gone very aggressively on this. Still, we have completed 3,000 policies with Rs 4 crore of premium.

The online channel is picking up in India. We will increase our presence online. We want to be present in all segments, irrespective of the business we get from it.

The number of LIC products has come down significantly, compared to last year. Does this worry you?

We already have 16 products on individual platforms and seven on the group platform. While it is enough to cater to every segment, the appetite of the market is higher. We will come out with newer products with passage of time.

While agencies have been the biggest channel for LIC, will others like bancassurance also be an area of focus?

We are focusing on all channels, though agency remains our main strength. The focus is also on bancassurance and almost all public sector banks are our corporate agents. Recently, United Bank of India has also joined us with its network of 2,000 branches. We are not leaving behind any channel. Even direct marketing is contributing about two per cent of our business.

LIC has topped the Million Dollar Round Table (MDRT) list. How have you been able to achieve this?

Last year, we added about 22,000 agents to our kitty of more than 11 lakh (1.1 million). We are number one in the world in MDRT-registered agents. We will repeat it this year. Our strength is not only in the numbers but in quality. Internally, we have a scheme of career progression in the form of club membership for the agents. Our training centres train and re-train our agents on a continuous basis.

Your equity investments have shown good results, though there have been some contra bets?

Historically, LIC has been taking sound investment decisions. Up to November 10, we have purchased Rs 16,900 crore and sold Rs 29,000 crore and booked profits of Rs 11,500 crore in the equity market. We keep a close watch on the market and also on the future outlook among other factors. Safe and secure returns is our motto.

Health insurance is an area where private life insurers are gearing up. What are your strategies for expansion?

We sell 200,000-300,000 policies under health insurance every year. From our perspective, it is small. Our focus is there on health and we'd like to add more products. The market is there, as only about 25 per cent of the people have health insurance coverage in India, as against 80-85 per cent in emerging markets. We might also think of an online health product.

The passage of the Insurance Bill might get new entities into the Indian market. How do you view this?

Competition is good for any sector. Internally, for LIC, passion for customer service will continue. Our focus on professionalising our agency force and use of technology to provide convenience to customers will continue. The market will expand and we are happy the customer has reaffirmed his trust in LIC time and again.

Some attractive disinvestment opportunities are coming up. Is LIC gearing up for it?

We keep our eyes and ears open. We are open to the opportunities and take a considered view on it. Safety and return for the customer is our priority.