In an exclusive interview to ‘Developing India Mirror’ Correspondent Anish Singh, Mr Ajit Kumar Upadhyay, Senior DM, Delhi-1 Divisional Office, who served at various managerial positions of LIC of India, highlighted the future expansion plans and how the LIC has become a household name.
EXCERPTS:
Q. At the outset of completion of 60 years of your operations, do you think that people still trust LIC as the dependable and trustworthy life insurance provider of the country? If so, please elaborate the reasons thatof.
“…the achievement that we celebrate today is but a step, an opening of opportunity, to the greater triumphs and achievements that await us.”
-Pt. J. L. Nehru, from his ‘Tryst with destiny’ speech, 14-15 August, 1947.
A. Life Insurance Corporation of India has been a nation builder since its formation in 1956. True to the objective of nationalisation, the Corporation has always worked towards the benefit of both our customer and the larger community. Keen involvement of all the personnel working in the Corporation to the best of our capabilities in furthering the interests of the insured public by offering an efficient service with courtesy has very well been an ingrained and totally internalised objective for us, upon which we have modeled all our corporate and servicing endeavors since our inception.
From then to now, LIC of India has crossed many milestones and has set unprecedented performance records in various aspects of life insurance business. Today we are a financial conglomerate of global repute serving our clientele of over 29 crore matching international standards. Only three countries of the world are more ‘populous’ than this customer base! We continue to be the dominant life insurer in today’s liberalised scenario of Indian insurance and we are moving fast on a new growth trajectory surpassing our own past records. In our 59 years of existence, we have grown from strength to strength- be it customer base, agency network, branch office network, new business premium income and have been playing a significant role in spreading the socio-economic security net of life insurance widely across the country and beyond.
The international operation of LIC of India consists of overseas business activities in life insurance market in 13 countries with Branch Offices in Fiji, Mauritius and the UK, Wholly Owned Subsidiary in Singapore, Joint Venture Companies in Bahrain (for GCC countries of Kuwait, Oman, Qatar and UAE (Dubai and Abu Dhabi)), Nepal, Sri Lanka, Kenya and the Kingdom of Saudi Arabia.
Our endeavour gets a deserving resonance in us winning over 30 awards of excellence this year. Notable among them are the Golden Peacock awards for Corporate Governance and the Golden Peacock Training, the Superbrands-2015, Reader’s Digest Trusted Brand award, Money Today award, Greentech CSR Award, the Website of the year India Award, Dun & Bradstreet “India’s Top PSU’s 2015” and the India Insurance Award. Another remarkable achievement is our ranking by the international brand valuation firm ‘Interbrand’ for India’s Most Valued Brand 2015.
We, therefore, are positioned in the life insurance market as the most dependable and trustworthy public entity, true to the spirit of “Zindagi ke saath bhi aur zindagi ke baad bhi”; which commands respect for its business ethics and garners the trust of our policyholders in response to our promise of a world class customer service experience.
Q. What were the highlights of the country-wide Diamond Jubilee celebrations of LIC of India?
A. The Corporation has completed 60 years of its illustrious existence in 2016. We have decided to declare the year as the Diamond Jubilee year dedicated to the services of our customers. Starting from 01.09.2016 through 31.08.2017, an elaborate arrangement to make this year memorable for all our stakeholders especially the Community and the Customers is being aimed by us. Through all the activities planned to celebrate this occasion during the year, we expect to spread insurance awareness to the masses and bring more people into our service network.
Our yearlong celebratory activities include planning one Mega Event at all our Zonal and Divisional headquarters each, intensification of activities under the already running Swachh Bharat: Swasth Bharat programme of LIC of India viz. organizing weekly medical camps by each of our branch units and cleanliness drive in keeping with the spirit of the Clean India Pledge, adoption of one village per division with specific focus on drinking water facility, water harvesting, tube well installation, water conservation efforts as per the local requirements, adoption of one school per branch by providing infrastructure support like fans, water coolers, computers etc., distributing Student of the Year (SOTY) awards to classes 1-10 in the neighborhood schools, plantation of saplings by all the divisional and branch units; thereby reaffirming our commitment to the preservation and rejuvenation of environment.
Incidentally, our Divisional Office (LIC of India, Delhi-1) has planted over 3500 saplings with support of the MCD (South Delhi) in pursuance of our Green commitment to the society. Besides this, we have launched a wide range of Customer Relations initiatives to connect with our policyholders under our Customer Connect initiative viz. customer relationship programme, customer data collection drive, special camps for the Individual Pension Plan (IPP) policyholders’ awareness, cultural engagements like essay, elocution, debate, quiz and painting activities for the children of the neighborhood schools and TV/Radio/Press/Online interviews to create awareness and for sensitizing our existing and prospective customers about the basics of our life insurance products.
Q. Have the private insurance companies impacted the LIC business?
A. With the opening up of insurance sector, we have witnessed an inflow of reputed private players of both national and international genesis. So the sector has definitely ceased for us to remain monopolistic. A boon in disguise, this couldn’t have happened at a better time!
There has literally not been any adverse impact on us of opening of this sector to private players, thanks to our customer centric commitment and the trust reciprocated upon us by the people of India. One notices that with the inward flow of capital in the insurance sector, the ‘charged’ business activities of the insurers- ourselves included- and the resultant rise in awareness of the masses about this very basic human need of insurance for protection and sustained prosperity; this opening up has supported us favorably. A case in point would be the status of our formidable market share (2015-16) of 76.84% (new policies issued) and 70.44% (total first year premium income).
With our robust work culture, a disciplined and dedicated battery of personnel and an overwhelming public support, which has helped us carve out a niche of our own-from the entire national gamut of financial servicing-we have managed to take this ‘opening up’ to our stride. Inspired with our primary obligation to our policyholders in investment of their funds-whose money is held by us in trust-without losing sight of the interest of the community as a whole so that the funds are deployed to the best advantage of our investors and the society; we have consistently stayed on the top of the ‘podium’.
Q. How do you plan to reach out to the lowest strata of the society?
A. We at LIC offer a basket of assurance options catering to the needs and aspirations of various segments of all our prospective customers and their families viz. the infants, adults, the salaried ones, the health conscious in need of a whole-family ‘umbrella’ healthcare assurance, the retirees, the ones who would rather go for a lump-sum payment for their insurance plan(s), the online shoppers etc. Offered by us is an assortment of Endowment Assurance, Term Assurance plans, Children Plans, Pension Plans, Micro Insurance plans, Health insurance plans, Unit Linked plans, regular or single premium ‘money back’ plans which come handy, for example, to fund the 4/5 years’ college/technical education of your ward as well as various ‘riders’ which can be co-opted with these plans viz. term assurance, accidental benefit, linked accidental death benefit;enabling us in offering a customized ‘bouquet’ of life assurance solution for all our customers.
To reach out to the lowest strata of the society, life insurance protection is also offered under our Group Insurance policies catering to the unique needs of various groups such as employer-employee, professionals, co-operatives, un/organized sections of the society, the SHGs, Non-profits, NGOs, MFIs etc. We also provide insurance coverage to the people at subsidized rates under social security Group Schemes. Besides providing insurance coverage to employees, the Corporation also offers Group Schemes which provide funding of gratuity, pension and leave encashment liabilities of the employers.
Q. Which is the most popular insurance plan in the country?
A. We are catering to the subjective needs of a variety of segments with our diverse offering and this is pretty vast by any measure viz. the options of age at entry (from 90 days to 85 years), maximum permissible ticket size (from Rs. 2.00 lakh to literally unlimited permissible investment amount under our immediate annuity plan Jeevan Akshay-VI), duration of risk cover on the life of the ‘assured’ (which literally ranges upto unlimited, lifelong risk coverage beyond the premium payment duration/date of maturity under our flagship the Jeevan Anand), health plans with options-by means of midterm “top up”- to avail whole family healthcare assurance including even the parents of one’s spouse!
All our plans are designed and offered with a keen eye on the specific need(s) of the targeted group/segment and are very popular inter se. In terms of absolute numbers of the selling made, our endowment plan, the ‘Plan no.814’, the New Jeevan Anand and the Jeevan Rakshak stand out as the ‘bestsellers’ and in terms of first year premium income, our Jeevan Akshay-VI has already crossed the spectacular Rs. 4,500 Crore mark.
Q. What are the policy plans for NRIs?
A. All our plans on offer are very well suited for the myriad assurance/saving/security/wealth creation solutions of both our resident and non-resident patrons including but not confined to the the High Net Worth (HNIs) individuals and the ‘Keyman’. The NRI segment has particularly been found to zealously insure itself to the maximum permissible assurance coverage of their lives, compliant to the guidelines of the Regulator and the Government directives; thanks to their highly updated insurance awareness.
The single premium type immediate annuity plan which guarantees an attractive RoR, the Jeevan Akshay-VI; which offers ten options of pension payments ranged over four modes (i.e monthly, quarterly, half yearly and annual) and our Term Assurance (including the e-Term) plans are found to be ‘trending’ in this segment.
Q. How is the concept of digitalisation promoting LIC’s business?
A. Here, at LIC, world class infrastructure support is being harnessed to give a genuine and satisfactory customer service. We have been one of the pioneering organizations to have introduced the leverage of the ITES (Information technology enables services) to cater to the needs of the customers and our business operation.
Armed with our 4770 offices and 33160+ touch points (as on 31.03.2016) which are fully computerized and networked, the highly trained and motivated personnel i.e our employees and the field force, state-of-the-art customer portals offered by our advisors and business associates which gives you a 24X7 doorstep service experience and dedicated online interface on multiple platforms-Linux, iOS, Android, Windows (all browsers) and Windows 8.1 Tablet; we have reached the nook and corner-both physical and virtual-of the life insurance biome. Our social media presence on Youtube, Facebook and Twitter (@LIC India Forever) engages the tech savvy genNext users with us. The SMS helpline (“LICHELP<policy no>”, sent to 9222492224 or 56767877) addresses customer queries and complaints in real time.
With the growing use of technology, it has become imperative to engage meaningfully with the masses not only for communicating with our customers but also to ensure that the policy holders receive the dues payable to them promptly. We are well aware that the secret to a satisfactory and engaging customer service lies in our prompt adoption and implementation of technological novelties. For a robust and sustainable business growth ensuring excellent customer service, LIC of India has implemented digitalization in a big way and continues to do so.
Q. What would be the immediate effect on LIC after the government raised FDI limit to 49 per cent from 24 per cent?
A. Despite global headwinds and a truant monsoon, India registered robust growth of 7.2 per cent in 2014-15 and 7.6 per cent in 2015-16, thus becoming the fastest growing economy in the World. Sectoral growth of GDP for 2015-16 (Advanced Estimates) is pegged at 1.1 per cent in agriculture and allied sectors, 7.3 per cent in industry and 9.2 per cent in services. Since all this is indicative of both the expansion of a ‘deep pocket’ customer base and enhanced investment opportunities for us, it gives a happy indication of our prospective business growth as well as the potential/projected return on our investments which ultimately translates into declaring better bonuses and dividend for our stakeholders.
While the economic parameters like inflation, fiscal deficit and current account balance have exhibited distinct signs of improvement; the Wholesale Price inflation has been in negative territory for more than a year and the all-important Consumer Price inflation has declined to nearly half of what it was a few years ago. Given the prevalent overall macroeconomic scenario and the normal level of rains recently witnessed, it would not be unreasonable to conclude that the Indian economy is all set to register growth in excess of 7 per cent for third year in succession. THIS is our assurance of faring continuously well-as has been our consistent experience from the past-in the face of the much hyped 49 per cent FDI and the anticipated ‘repercussions’ of the same.
Increase in FDI limit is bound to accelerate marketing and allied activities, which inter alia increases awareness and ‘insurance literacy’ among the masses including the uninsured. This, in turn, assures us that the lion’s share of this business growth would be directed to us, thanks to our reliable Brand image, our ubiquitous physical/virtual footprint and the untiring effort of our ‘alert’ field personnel who are ever ready to lap up any and every opportunity!
Q. What would be the expected business over the next 3 years?
A. With India’s insurable population expected to touch 750 million, life expectancy reaching 74 years and life insurance projected to comprise a handsome share of total household savings by the end of this decade; the future looks promising for our industry. Demographic factors such as a burgeoning middle class, the projected increment in our young insurable population and a growing awareness for the necessities of financial security, saving, healthcare assurance and post retirement planning is going support the growth of Indian life insurance business.
Already, as a 'prelude', the total insurance premium generated by the insurance sector increased from Rs. 3,94,235 crore in 2013-14 to Rs. 4,15,252 crore in 2014-15, during which period, life insurance premium registered a growth of 4.4 percent in India. Insurance penetration (which is premium volume as a ratio of GDP) was 2.71 per cent in 2001 and 3.3 per cent in 2014 while Insurance density (which is measured as the ratio of premium to population, the per capita premium) increased from US$11.5 in 2001 to US$55 in 2014.
Aided with several changes which are underway in the regulatory framework- potentially redefining the way this industry conducts its business and engages with its customers-and with our country's macroeconomic growth moving in the right direction and its pace expected to gather momentum in the coming quarters; we at LIC of India are confident that emergence of opportunities in life insurance market can only attain an upwardly mobile trend from here for us. We are watchful of the market dynamics and the competition therein, we are re-engineering our customer-engagement architecture and we are diligently working for a sustained and robust growth in LIC of India’s business.
Q. As a leading industry body, while half of the population is still uncovered with insurance, what steps has the LIC taken to reach out to that section of society, especially when we all know that LIC is working since decades?
“To strive towards excellence in all spheres of individual and collective activity so that the nation constantly rises to higher levels of endeavor and achievement”
Article 51A (j), Fundamental Duties, Constitution of India.
A. We, LICians wish that by 2020 every insurable Indian holds at least one LIC policy in her pocket and while an audacious vision like ours has to be matched by audacious actions and resolute commitment to make it a reality; we are confident that the high level of professionalism, dedication and know-how that exists throughout our organization will help us achieve this vision.
A separate vertical of Micro insurance which is a targeted instrument for inclusive insurance of the low income household has been pioneered by us at LIC of India and we have been (micro)insuring the eligible ones and the deserving under the relevant Social Security schemes. Capacity building in this segment, we understand, is a work in progress. We are honored to have launched our first MI product “Jeevan Madhur” at the hands of then president of India Dr. A.P.J. Abdul Kalam way back in 2006 and have honorably kept our promise since then.
The four pillars of (a) infrastructure assessment – taking stock of our state of both hardware (brick and mortar) and software (our inventory and its compatibility) capacities, (b) alignment and (re)engagement of our people- field personnel and staff, (c) technology intervention by way of process reengineering and (d) a robust and aggressive distribution blueprint-both numerical and productivity linked-have been identified for effecting a time bound and assessable improvement over our current performance en route our forward march towards the realization of our vision.
Encouraging scenario, both external viz. Indian economy growing as the world’s fastest, our rapidly growing middle class population, developing rural India, increasing women empowerment measures, governmental thrust on financial inclusion, real time DBT (direct benefit transfers), and JAM (the Jan Dhan, Aadhar and Mobile troika), increasing health, education and other social standards (the Human Development Index), improving state of our infrastructure (roads, bridges, airports, seaports, power, water, sanitation), an increased insurance awareness among our potential customers; and internal viz. a highly qualified, dedicated and experienced work force, our large agency force, the networked offices and touch points, large customer base, us managing the world’s largest Life Fund, significant growth in our alternate marketing channels, a consistently impressive claim settlement ratio and our strong brand, TheBRANDLIC; in all give us a belief that we are on a realistic path of achieving the Vision.