LIC eyes bancassurance to beef up income

Life Insurance Corporation (LIC) has drawn up plans for a five-fold jump in its first premium income from alternate channels.

It has set a target of mobilising Rs 1,000 crore of first premium income from alternate channels in 2005-06 against Rs 200 crore in 2004-05.

"We expect Rs 700 crore to Rs 800 crore of premium income from bancassurance partners and the rest from the other alternate channel of corporate agencies," said K Sridhar, managing director, at the corporation's 34th bancassurance tie-up with Bank of Rajasthan (BoR). BoR snapped its arrangement with Birla Sun Life Insurance to join LIC.

LIC also announced an arrangement with IndusInd Bank, for group life insurance cover for the private sector bank's savings account holders.

IndusInd Bank will provide a Rs 3 lakh cover to NRIs and Rs 1 lakh cover to resident account holders. The group insurance cover is one of the several initiatives to broad-base NRI client-base and expand business.

The bank plans to cover 75 per cent of its account holders under the group insurance scheme by the end of March 2006, IndusInd Bank's managing director Bhaskar Ghosh said. LIC already tie-up with nine other banks to for providing group insurance cover to depositors and has covered five lakh customers of these banks.

BoR managing director B M Sharma said: "We think we can target more customers with the tie-up with LIC. The larger image of LIC forced us to end our relationship with Birla Sun Life. People from all parts specially in rural areas have more faith in LIC."