LIC Vizag eyes 80% growth in first premium collection

Life Insurance Corporation of India (LIC)'s Visakhapatnam zone, which comprises three coastal districts from Srikakulam to Visakhapatnam, is targeting an 80 per cent growth in first premium collection this fiscal.

The zone has achieved a 47.63 per cent growth in premium collection in the first half of the current fiscal.

Speaking to Business Standard, S Behara, senior divisional manager of LIC Vizag zone, said: "We are concentrating more on salary saving policies and group insurance policies this fiscal. We have been receiving good response for our equity-linked insurance policy 'Bima Plus' as well. In addition, we are strengthening our corporate agents' system. Owing to these reasons, we expect a growth of 70-80 per cent in first premium collection this fiscal."

"Last fiscal, our division collected Rs 68.36 crore first premium by selling 2.92 lakh new policies. We are now targeting to sell around four lakh policies and collect at least Rs 120-125 crore first premium by end of the current fiscal," Behara said.

In the first half of the current fiscal, the zone has sold 99,280 policies and collected Rs 28.86 crore first premium as compared to the 93,037 policies and Rs 19.55 crore first premium in last fiscal's corresponding period, thus posting a growth of 6.79 per cent and 47.63 per cent respectively.

Behara said that the zone's salary saving policies business, which contributed to more than 50 per cent of its total business, was reduced to 12.5 per cent last fiscal.

"Keeping this in mind, we are now concentrating on salary saving policies," he added.

"Our zone has 18 corporate agents including five nationalised banks. We managed to do a meagre business through these corporate agents last fiscal. We are expecting a Rs 5 crore first premium by selling 3,000 policies through these corporate agents' system this fiscal," Behara said.

"Group insurance is another area through which we plan to increase our business. Visakhapatnam Urban Development Authority (Vuda) and Chodavaram Sugars have taken group insurance policies from the zone. Recently, Vuda paid Rs 7 crore premium out of its total premium of Rs 25 crore. We are also negotiating with Visakhapatnam Port, Visakhapatnam Steel Plant and other public sector undertakings. We are expecting a good number of polices and hefty premium collection under the group insurance policies this fiscal," he added.

Under the 'Bima Plus' equity-linked policy, the zone sold only 461 policies and collected Rs 75 lakh premium last fiscal. In the first half of the current fiscal, the zone sold about 3,000 policies and collected Rs 5 crore. We are targeting to sell 10,000 policies and collect more than Rs 10 crore under this equity-linked policy," he said, adding that the corporation is increasing its agents-network to 11,000 by the end of the current fiscal.

"Apart from increasing our business, we are striving hard to reduce the maintenance costs. Due to this, we are expecting a 20 per cent growth in our net surplus," he said.

"Our maintenance cost was 17 per cent of our total premium collection last fiscal. We reduced it to 16 per cent by the end of September. We plan to reduce it further to 15 per cent by he end of the current fiscal. Owing to this, our net surplus will rise further," he said.

Behara said that the zone is expecting to achieve a Rs 250-crore net surplus as compared to Rs 205 crore last fiscal.

"We have achieved Rs 106 crore surplus in the first half of the current fiscal as compared to Rs 97.58 crore in last fiscal's corresponding period," he said.