LIC Vizag posts 47% growth in FPI, despite odds

Sum assured amounts increased by 2.39% to Rs 1,776.13cr in FY05

Life Insurance Corporation of India (LIC)'s Visakhapatnam division, that covers the three coastal districts from Srikakulam to Visakhapatnam, has posted a 47.1 per cent growth in first premium income (FPI) in the fiscal ended March 31, 2005, as compared to the previous year. This, in spite of less number of policies being sold during that period.

It may be recalled that due to the changes in the incentive scheme, LIC agents and development officers had stopped selling policies for about 4-5 months during the last fiscal. As a result, the number of policies issued came down from 2.92 lakh in 2003-04 to about 2.86 lakh in 2004-05.

"In spite of this, we managed to increase our FPI to Rs 100.57 crore in 2004-05 as compared to Rs 68.36 crore in the previous year, thus registering a growth of 47.1 per cent," S Behera, senior divisional manager, LIC (Vizag division), told Business Standard.

The Vizag division has also seen the sum assured amounts increase by 2.39 per cent to Rs 1,776.13 crore in 2004-05 from Rs 1,734.69 crore in the previous year, he added.

In the current fiscal, the division is targetting to collect Rs 150 crore FPI by selling 4 lakh policies for a sum assured of Rs 2,521 crore.

"To achieve these targets, the corporation will be increasing the division's agent network by another 2,500 from the existing 10,800. We will also look at selling a large number of small value policies (between Rs 10,000 and Rs 40,000) in the rural areas. In addition to this, we are expecting good business from our corporate agents too," Behera said.

"During the last fiscal, our corporate agents like UCO Bank, Indian Overseas Bank, Oriental Bank of Commerce, Corporation Bank, City Union Bank, IndusInd Bank, Repco Bank and Allahabad Bank contributed to around 1.5 per cent of our total business. This fiscal, we expect this number to grow to five per cent. Negotiations are on with five other banks like Andhra Bank and Dena Bank in this regard," he added.

Apart from securing new businesses, the division is taking special measures to reduce policy lapses from 13 per cent to 10 per cent by the end of March 2006. This apart, it is also looking at reducing its administrative expenses by another one per cent from the current 19.18 per cent.

"LIC Vizag division sold 5,016 Bima Plus policies with FPI of Rs 9.74 crore and 10,990 Future Plus policies with FPI of Rs 16.03 crore during the last fiscal. We are now focussing on selling unit-linked policies," he said.

The division settled 95,255 claims (both death and maturity) worth Rs 160 crore during the last fiscal, Behera added.