Entry of private players eats into LIC's numbers

The entry of private players in the insurance segment seems to have affected Life Insurance Corporation's performance. LIC's first premium income collections in the year ended March 31, 2004, at Rs 8566 crore, are 20 per cent less than the corporation's target.

"After the privatisation of the insurance sector, LIC's first premium income was fallen by 20 per cent (from the target) and the number of policies sold has dipped by 7 per cent," said Anil Khanna, senior divisional manager, LIC.

The corporation sold over 2,69,52,000 new policies in 2003-04, with a sum assured of Rs 199698 crore and a total first premium income at Rs 8566 crore. The corporation has also collected Rs 6070 crore under 3.33 lakh Virshtha Pension Bima Yojna (VPBY) policies as on March 31, 2004.

The number of policies serviced by LIC is the highest by any insurance company in the world. As of March 31, 2004, the corporation has 15.39 crore policies in force with a sum assured of Rs 9,25,033 crore.

The corporation has covered over 2.65 crore lives under its group insurance scheme during the last financial year. It insured 27.71 lakh new lives under the scheme. Under its social security scheme, over 17.40 lakh people of lower strata were provided security cover.

LIC's total income during the last financial year stood at Rs 93,089 crore. The corporation has paid Rs 19,596 crore to its policy holders. It has a life fund of Rs 3,21,753 crore, while the total assets are estimated at over Rs 3,67,360 crore.

The corporation has initiated various new customer friendly initiatives to take on the private sector competition. "We have adopted a new citizen charter with a goal to render more efficient services and improve quality," Khanna said.

Few of the recent such initiatives include eight info centres, 59 interactive voice response system with a dial number 1251. A policy holder can pay his premium at any of the corporation's 1980 branches, which are interconnected through MAN and VAN. Premium can also be paid through the internet.

At present, eight banks and three payment gateways act as agencies for collecting premium.

"Premium payments can also be made through ATMs of Corporation Bank and UTI Bank. Premium payments through ECS has started at Mumbai and Chennai and the corporation plans to extend the facility to all other major cities in the next one year. Even premium payment has started through City Bank kiosks in Mumbai and soon will be extended to major cities as well. The corporation's website also provides all information regarding corporation, life insurance, LIC products, tax laws, premium calculations and policy servicing amongst others," said Khanna.