LIC to introduce more Ulip products

State-run Life Insurance Corporation (LIC), after facing tough competition from private sector life insurers, has started gaining market share in recent times. DK Mehrotra, managing director, LIC, speaks to FE’s Kumud Das about the corporation’s strategies to reposition itself in the changing market environment. Excerpts:

How has LIC been able to regain its lost market share from the private sector?

We have grown our market share in the last two years, owing to a better performance. Currently, our market share is over 72% in first premium income and we have to be more competent to operate in the competitive environment. Processes to upgrade skills are already on at LIC at a vigourous pace. We have to strongly connect with the market in terms of products and services. We have been able to give policyholders a return which is better than other market players and we are also offering both...high security and good returns. Our return is in terms of increasing the annual bonus and we want to increase our bonus further. Above all, we are working hard to match our policyholders’ aspirations and I believe we have the flexibility to change accordingly.

What is your product mix?

Our product mix stood at 60:40 between Ulips and traditional products during the beginning of the current fiscal. Post September, it has changed to 65:35 and I hope it would again change to 60:40 by the fiscal end. It is true that our sales were affected in October, since our new Ulip products are yet to be accepted by policyholders.

At a time when private sector insurers are shutting down branches, you seem to be expanding your branch network.

While we are busy expanding our foothold, we are also adopting cost-cutting measures. We have started the concept of satellite branches..where operations can be managed by just one official. This year, we have opened 80 satellite branches so far and the figure is likely to go up to 120 by the end of the fiscal. The productivity of these satellite branches has been good as they are supporting their parent branches in premium collection.