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 Interview of Mr N C Sharma, Managing Director, Life Insurance Corporation of India
Interview of Mr N C Sharma, Managing Director, Life Insurance Corporation of India on Budget gains, online premium payments, innovative insurance policies and a lot more…
The Life Insurance Corporation, (LIC) all these years basked in its monopoly status only to be shaken up with the entry of private insurers. Not to be left behind in the competition, it has invested heavily in technological
upgradation and also plans to spruce up its customer service. A huge agent force, over 2000 branches and thousands of policyholders, the corporation already has built up a solid reputation for itself over the years.
What benefits has the Union budget brought for the insurance sector?
In addition to the existing provisions the Union
Budget 2001-02 contains several items that are favourable to the insurance sector:
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Section 88 of the Income Tax Act is amended and individuals with annual income less than Rs.1 lakh will get 30% rebate. This will help the small and medium investors.
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Technological upgradation of the insurance and banking sector has been encouraged - this will further improve the quality of service.
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Two new social security schemes - ‘Khetihari Mazdoor Bima Yojana’ and ‘Shiksha Sahayog Yojana’ have been introduced.
From being a monopoly to being one among so many - how do you plan to take on the tough competition?
We have always had competition for the people’s savings, so we have always been working on competitive lines.
However, now with the opening of the insurance sector we enter direct competition but with some very strong advantages. Our reach, our financial solidity and the brand equity we enjoy will be our greatest strengths in the coming times.
Our product portfolio and improved technology are also our strengths.
The public has shown immense confidence in us and we have always vindicated the trust. We are sure, for the above reasons, the public will repose the same confidence in us in the years to come. This will provide us tremendous advantage in competitive times.
Global insurers will bring in their professionalism and improved service - problem areas said to be associated with your organisation. How do you plan to rectify the situation.
LIC is one of the most professional organisations and is focussed on generating customer satisfaction. We are a very large organisation and we have consistently adopted high benchmarks in servicing. Our claims payment records, for instance, are comparable to the best in the world.
Private insurers plan to introduce innovative insurance covers. Are you planning any such covers or will your organisation dole out the same fare in future too?
We have a very wide range of products which make us almost a super market as far as personal finance and life insurance is concerned. The products on offer by the competitors, more or less, have some modifications on the plans we have been offering always and this goes on to show that in product design we are leaders.
LIC has been in the forefront of product innovation and will continue to do so.
LIC, say newspaper reports, has experienced severe staff exodus and the cream of your organisation has joined private insurers? How do you plan to go about it?
There is no such exodus of people from the organisation and we have adequate number of competent people to man all our operations. As you can see the exit of a few people has not affected our performance at all.
Online sale of policies will happen soon. Are you planning to adopt any such move? If no, why not? If yes how long will it take and how do you plan to go about it?
Online transactions should be completely secure and have the confidence of the insuring public. As and when marketing on the internet - affecting financial transactions and concluding contracts and placing documents - become fully secure, we will be certainly in the arena for internet marketing.
You plan to enable making premium payments online. How should a policyholder go about it? How far would it be viable since use of technology is yet to seep into the interiors?
We are joining the system for payment of premium through the Internet. We plan to provide our policyholders the facility of paying premium over the internet before the end of this financial year. Initially, this service will be available in Mumbai, slowly it will be extended more cities.
Very soon about 40 centres will be inter-connected and we will be expanding this facility of premium payment over Internet to policyholders to more and more cities.
The policyholders in any of the cities inter-connected by our Wide Area Network will have to register for the purpose of making premium payment over the Internet. Once he has done the registration he will be able to affect transactions.
What are your sale projections for the current year?
We set out to do new business of 1.94 crore individual assurance policies for a Sum Assured of Rs.1.10 lakh crore and First Premium Income of Rs.3,823 crore. However, through our marketing efforts and product innovations we have experienced very high growth rates and we expect to well overshoot the target.
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