. ”We intend to increase our market share of non-par business as well as diversify the channel mix while ensuring that our agents stay as the main distribution pillars of our products,” LIC chairman M R Kumar told shareholders in company’s annual report for FY22.
Mumbai:
After a successful listing , Life Insurance Corporation(LIC) will hold its first-ever annual general meeting (AGM) virtually on September 27.
The insurer which got listed on the bourses during the year, reported an increase of nearly 40 per cent in its standalone net profit at Rs 4,043 crore in 2021-22.
More than 95 per cent of LIC’s individual business in terms of premium is sourced through agency force. It is less than 3 per cent through bancassurance channels.
. ”We intend to increase our market share of non-par business as well as diversify the channel mix while ensuring that our agents stay as the main distribution pillars of our products,” LIC chairman M R Kumar told shareholders in company’s annual report for FY22.
‘Awareness of the need for insurance to meet life exigencies is at an all-time high. LIC will continue to explore and expand into newer areas keeping in mind the changing needs of our customers,” he said.
”Digital interventions, data analytics and process flow changes to leverage the potential of the changing times will be embarked upon to cater to the choices of the myriad segments with existing and emergent needs,” the chairman said.
He said the company believes its aggressive diversification by adding more non-par products suited to customer needs will yield the desired results.
The insurer has a dominant business mix coming from the participating business (par products). For fiscal ended March 2022, share of par business within the overall individual business, in terms of annualised premium equivalent (APE), was as high as 93 per cent.
”Within that framework, we intend to sharpen the focus on Bancassurance to steadily and considerably increasing its volume and thereby its share in our overall business. Our ties up with banks continues to be robust,’’ he said..
”We intend to work with all partner banks and at the same time strengthen the IT processes between the banks and LIC,” he said.
The structural factors challenging the industry growth are persistent low interest rates and pricing pressures aggravated by price comparison websites. Though many insurers have undertaken cost savings programs, the aggregate results are not very encouraging, said LIC
Industry-wide, productivity improvements have been limited. Insurers need to begin the hard core process to improve productivity by establishing the trajectory and full performance potential of the business across the value chain-including sales and distribution, product development, operations, technology, and corporate functions- rather than mere piecemeal attempts at improvement. Only a transformative approach will allow an insurer to survive and thrive in a post COVID-19 world, said the corporation.
Having a market share of 65 per cent, the state-owned life insurer offers 17 individual participating products, 17 individual non-participating products, 11 group products and 7 products with rider benefits.
Non-participating life insurance products do not offer any bonuses or add-ons such as dividends to the policyholders. A pure term life insurance policy is non-participating product offering a fixed cover against payment of the policy premium.
LIC’s agency strength at 1.33 million, a large section of which is working in the rural areas of the country, has ensured a pan India presence across the various socio economic segments.
Increased focus on IT enablers for the field force would aid higher persistency levels and enhanced customer satisfaction. Last year saw a 70% growth in the number of digital transactions, said LIC.