LIC eyes 5% sales from bancassurance

Life Insurance Corporation of India (LIC) is looking at a huge jump in premium collected through bancassurance, amid increasing competition from private players.

Life Insurance Corporation collected Rs 1,281 crore in premium through bancassurance, which involves using bank branches for selling policies and collecting premia, FY11. This accounted for a little over 0.60% of the total premium collection of Rs 2,03,358 crore.

The corporation sold 7 lakh new policies through this channel during 2010-11.

"Target for the current year is that we want to get 5% of our total premium from bancassurance. And 5% of LIC's premium is huge, you have to realise that," LIC Executive Director (Corporate Communications) Vipin Anand said.

However, he said leveraging the channel was not easy.

"Definitely the scope is much more. Only thing is - for banks which do not own an insurance company, insurance is not very high on priorities. That is the reality, we have to understand that," Anand said.

"If the insurance company is owned by a bank, there is an entirely different kind of a stake...Their mainstay [of distribution] is going to be the bank," he added.

LIC has tie-ups with various banks, including Corporation Bank, United Bank of India, Bank of Maharashtra and Uco Bank.

Anand further said that LIC's 1.337 million agents are its mainstay and it should not be compared with the private sector insurers which count banks as promoters.