LIC to concentrate on other channels of distribution - July 2, 2008

Life Insurance Corporationis concentrating on bancassurance and other alternative channels for business growth. Bancassurance is a way of delivery or sale of insurance products via banks. The insurance major generates a mere two per cent of its business via alternative channels. In comparison, private players get 30 per cent of revenue via these channels. In 2008-09, however, LIC aims to double its first premium income (FPI) from bancassurance to Rs 1,600 crore. In 2008-09, LIC will increase its focus on alternative channels of distribution as a way of reaching out to masses. "The number of policies sold through bancassurance and other channels should grow to 5 per cent of total business, up from 2.1 per cent in 2007-08. While LIC has been catching up on the model of alternative distribution network, for private players this has been a successful business model since a long time. LIC is now looking to join hands with more banks before a private player can grab the opportunity and leverage upon their network. During last year, the Eastern zone recorded maximum business contribution through bancassurance.