'LIC premium collection not affected by pvt players'

Putting up a brave face, R N Bhardwaj, chairman of Life insurance of India (LIC) said that private insurance companies have had no impact on the LIC's premium collection in the last four years.

This despite the fact that after the privitisation of the insurance sector, LIC's first premium income was reduced to 80 per cent and the number of policies has been reduced to 93 per cent.

According to industry sources, LIC's market share has dipped by over 7.5 per cent to 82.39 per cent in the first quarter of this fiscal year.

"Our premium collection as on December 31, 2004, stood at Rs 5,600 crore, an increase of 38 per cent over last year, which reflects LIC is growing and is not affected by private life insurance companies," R N Bhardwaj told Business Standard on Thursday.

According to the figures released by insurance Regulatory Authority (IRDA), LIC clocked a premium of Rs 3,015 crore during the first quarter of the current financial year, while the private players have clocked Rs 645 crore in the premium income in the same period.

LIC's market share would be higher if Varishtha Pension Bima Yojana is included, which garnered Rs 985 crore in April-June 2004.

"Our number of policies has more than doubled from 1,60,000 crore to over 3,40,000 crore in the last four years, since the private insurance companies entered in 2000. This shows we are least affected by the competition from private insurance companies. The number of policies serviced by LIC is highest by any insurance company, across the world," said Bhardwaj.

The corporation is targeting to close the current financial year with a premium income exceeding Rs 11,500 crore, from the sale of 3.10 crore policies.

Last year, the corporation has sold over 2,69,52,000 policies on the new business front, under the sum assured of Rs 1,99,698 crore, with the total first premium income of Rs 8,566 crore. The cooperation has also collected Rs 6,070 crore under 3.33 lakh Virshtha Pension Bima Yojna (VPBY) policies as on March 31, 2004.

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

With the increasing competition in the insurance sector, LIC has initiated several new customer friendly initiatives to retain its leadership position in the sector.

Some of the customer friendly initiatives introduced by the LIC includes, the info centre, operational in eight centres, and IVRS, working in 59 centres 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 Internet. At present eight banks and three payment gateways are acting as agencies for collecting premium and the facility is available free of charges.