Top Clients Help Lic Sell Over Rs 750 Crore Policies In H1

The Life Insurance Corporation of India's change in focus on the high-end customer has paid off.

The insurer has sold over Rs 750 crore policies to the high networth individuals for the first six months of the fiscal, where the value of each policy exceeds Rs 1 crore. This is as opposed to Rs 865 crore worth of policies sold to the high end individuals for the entire fiscal 2000-01.

"The cream layer has not gone to the private players," said LIC managing director N C Sharma.

LIC's results further demonstrate a growth rate of 270 per cent in the sale of Jeevan Shree plan, where the minimum value stands at Rs 5 lakh and above. "The focus is on the upper crust in a big way, as we want new players to have as little of the pie as possible," said Sharma. LIC has been targeting the higher end -- business people, high-paid professionals, banking executives, MNC executives, industrialists and film stars.

 

Acknowledging that LIC had been perceived to be weak in terms of the top end, Sharma said as the competition is tapping the high end market, it has been necessary to change the focus. At the same time, he was quick to point out that the rural segment would not be neglected.

LIC sold over 77 lakh policies in the period April through to October 15, 2001, mobilising a total first premium income of Rs 6,658 crore, indicating a growth of 299 per cent. Of this, Bima Nivesh helped the corporation mop up Rs 3,676 crore, individual assurances Rs 1,737 crore and individual pension plans Rs 1,245 crore.

LIC has mopped up more than last year's entire first premium income of Rs 6,200 crore in the first six-and-a-half months. Even as the maximum growth was in its single premium product -- Bima Nivesh, LIC is changing its focus in its products as well. It is moving away from single premium products to individual assurances and pension plans. "We will focusing more on individual assurances and pension plans."

This is partly on account of the way the downwards slide in interest rates has been negatively affecting the returns on the single premium products. "The quantum of business from conventional business will pick up," said Sharma. Individual pension plans saw an increase of 684 per cent in growth for the first six months as against the corresponding period last year. Individual assurances have seen a growth rate of just 43.8 per cent. The maximum growth was in single premium products with sales up by 1,127 per cent.

"Our target for the year is to sell 2.41 crore policies, against last year's two crore. Of this, around 2.29 crore policies will come from individual assurances against 1.9 crore," said Sharma.