LIC Aims To Sell 4mn Policies In Current Financial Year - Aug 14 , 2008

Life Insurance Corporation of India (LIC) has set an aim of selling four million policies in rural areas in the current financial year. It sold over 5 crore insurance policies last year, of which over 1.1 crore went to rural areas. LIC said that two years ago, the insurer had sold 8 lakh policies via its alliance with NGOs, micro-finance organisations, co-operative societies and rural banks. The insurance penetration in urban India is 47 per cent, while it is only 27 per cent in rural areas. The rural and informal sectors are not a homogenous category and are geographically dispersed. It has been calculated that if the cost of a policy is Rs 300-400, the distribution cost is double. A panel chaired by former LIC chairman, NM Govardhan recently suggested new sales channels for retail insurance products with adequate safeguards. Importantly, it broadened the definition of a micro-insurance agency to comprise rural kiosks and other rural distribution networks. The rural kiosk can be a revolutionary new point of service delivery. Whether a makeshift stalls, or a multipurpose store offering other services, the kiosks too are owned by entrepreneurs who need individual risk cover apart from their potential role as micro-insurance agents.

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.

LIC To Reposition 3 Non-ULIP Products - June 25, 2008

Life Insurance Corp (LIC) is looking at repositioning three of its conventional non-ULIP products, Jeevan Tarang, Jeevan Anand and Jeevan Sathi, soon. The repositioning is being done to make the products popular with better publicity, said RR Dash.

At present, the sale ratio of ULIP to non-ULIP products is 80:20, and the target is to convert it to 70:30. Besides, products like Tarang and Anand have some special features, he said. In Tarang, even after the maturity, the policyholders will get survival benefit till 100 years of age. In case of Anand, they will get the life-cover even without paying the premium after maturity.

Market Plus -I covers life, accident benefit and critical illness for insurers from 18-75 years. The amount of critical illness benefit ranges from Rs 50,000 to Rs 10 lakh, and in case of accident, it is between Rs 25,000 and Rs 50 lakh. LIC has contributed Rs 1,583.26 crore as development loans to the state government. In terms of the amount, it is only secong to Maharashtra, where LIC contributed Rs 1,622.58 crore, Dash said. Last fiscal, the first-year premium income was to the tune of Rs 4,102 crore. At present, LIC is enjoying a market share of 63.64%.

LIC Eyes 4 Million Policies Sales In Rural Areas - June 11,2008

Life Insurance Corporation of India (LIC) is eyeing to sell four million policies in rural areas in the current financial year. Previous year, LIC sold over 5 crore insurance policies, of which over 1.1 crore went to rural areas. The insurance penetration in urban India is 47 per cent (which means that almost one out of every two paid workers in urban India is insured), while it is only 27 per cent in rural areas.

LIC Mulls To Leverage The Strength Of High Performing Agent

LIC mulls to leverage the strength of its high performing agents and to tap new talent in the face of growing competition from private insurers. The corporation has drawn up a strategic business unit for recruiting new agents and offering incentives to existing high performing agents. LIC currently has an agency force of 12 lakh and mulls to recruit around 1 lakh more this year. The SBU, which is called Chief Life Insurance Advisors works on a new model. As per this model, LIC will choose some of its high performing insurance agents and offer them the opportunity to be Chief Life Insurance Advisors. Until now, LIC has been appointing only development officers to manage agents. The corporation, which showed a sharp slip in growth last year, is now looking at building up and creating a strong agency force.

LIC Housing To Set Up Real Estate Fund

Chennai: LIC Housing Finance plans to float a fund of about Rs 350 crore. After gaining experience with the fund, LIC Housing expects to set up a ''REIT'' (Real Estate Investment Trust, which is a mutual fund for investing in real estate projects.) LIC Housing sanctioned Rs 7,385 crore in the current year up to February 29 and disbursed Rs 5,941 crore. Sanctions and disbursements grew 51 per cent and 41 per cent respectively over the corresponding periods last year.

LIC Housing does not take any refinance from NHB, which according to Mr Mitter, is not cheap. Nor is the company (as any other housing finance company) allowed to borrow from overseas markets. Close to 85 per cent of the company''s loan portfolio is made up of small loans, of less than Rs 20 lakh - which, incidentally attracts a lower risk weight of 50 per cent. LIC Housing''s exposure to large projects is about 5 per cent of its portfolio, but it wants to double it next year.

LIC Housing To Float Real Estate Fund

Chennai: LIC Housing Finance intends to float a fund of about Rs 350 crore. The fund, which will invest in large projects, will be created within the next three months, S.K. Mitter, Director and Chief Executive, LIC Housing Finance, told a press conference here on Friday.

Mitter said, after gaining experience with the fund, LIC Housing expects to set up a REIT’ (Real Estate Investment Trust, which is a mutual fund for investing in real estate projects.)

Mitter was here in connection with an ongoing property fair, ‘Living Spaces 2008’, an event sponsored by LIC Housing Finance and organised by The Hindu’s Property Plus. The event opened here on Friday and will close on March 10. (For those who book for property at the fair, LIC Housing offers a special interest rate of 10 per cent (floating) and special processing fee of Rs 5,000.)

LIC Housing, he said, sanctioned Rs 7,385 crore in the current year up to February 29 and disbursed Rs 5,941 crore. Sanctions and disbursements grew 51 per cent and 41 per cent respectively over the corresponding periods last year. Mitter said that LIC Housing enjoys a 150-basis points spread on its loans.

Loan portfolio

Asked if the company would drop interest rates for loans up to Rs 20 lakh, as desired by the Finance Minister, Mitter said that much as LIC Housing would like to do that, it may not be possible for the company, given the firm cost of funds. If the company could access cheaper funds, perhaps subsidised by the National Housing Bank (NHB), it would pass on the benefits to borrowers, he said.

LIC Housing does not take any refinance from NHB, which according to Mitter, is not cheap. Nor is the company (as any other housing finance company) allowed to borrow from overseas markets.

Close to 85 per cent of the company’s loan portfolio is made up of small loans, of less than Rs 20 lakh which, incidentally attracts a lower risk weight of 50 per cent. LIC Housing’s exposure to large projects is about 5 per cent of its portfolio, but it wants to double it next year.

GE Money-LIC JV To Take Off

LIC is going ahead with GE Money JV for its credit card venture. It has also given KPMG the mandate to look for a financial partner for the balance 14% stake that is yet to be sold in the venture. Although, the corporation was supposed to launch the card in March, it is now expected that the venture will roll out only by the second quarter of the next financial year. LIC has 40% in the venture, while GE Money''s stake is 35%. Corporation Bank will hold 4%, LIC Housing Finance will have 5% and LIC MF will have a 2% shareholding. Industry sources said LIC will look for a partner that will be able to pay a premium.

LIC To Start Card Business In September

Kolkata: Life Insurance Corporation of India (LIC) will be rolling out the credit card business by the first week of September. LIC will ink an agreement with joint venture partners for the purpose. The insurance behemoth will set up a joint venture firm called LIC Card Services in accordance with RBI guidelines. The central bank requires the formation of a new registered entity before a foray into the credit card business.

The payment gateway could be either Visa or Mastercard. LIC is engaged in talks with both, according to a senior company executive. LIC would own the largest stake in the JV, around 40 per cent, followed by GE Money India at 30-35 per cent. The insurer had signed a memorandum of understanding with GE Money India, Corporation Bank, LIC Housing Finance and LIC Mutual Fund in September last year to create a credit card company. Some loose ends would have to be tied up before the credit cards are finally launched. LIC has already linked its 2048 offices across the country through a software network to provide multi-city facilities to its customers and is in the process of checking the software platforms. LIC is also fine-tuning the channel networks and merchant establishments that would support the marketing of its credit card. LIC would offer the facility of unsecured loans against the credit card. It would also allow policy premiums to be paid through its own credit card. LIC a database of 19 crore policy holders and aims to add around 1 crore customers in three years. It is confident of having a network of 32 crore policy holders by 2011. It has 14 lakh agents and is adding 1.5 lakh every year.

LIC Development Officers To Protest Against FDI Hike In Insurance Sector

New Delhi: The National Federation of Insurance Field Workers of India (NFIFWI) has announced a Parliament march on March 5, protesting the proposed move to hike foreign direct investment (FDI) in the insurance sector. NFIFWI, a body representing 21,000 development officers of LIC, has said that such a move was appeasing the private insurance companies. A release from the federation has said that the main reason for the proposed increase in FDI limit was the fact that these companies were running up heavy losses.According to the source, the management has also significantly reduced the income and working expenses of the field force through a unilaterally imposed Growth Oriented Incentive Bonus (GOIB) Scheme in August 2004.

LIC To Insure Over 30 Lakh Women Shgs

Mumbai: The Life Insurance Corporation of India (LIC) will be insuring all women Self Help Groups (SHGs) that are credit-linked to banks. The corporation had already got a proposal from the Government of Andhra Pradesh to insure 20 lakh women SHGs. The corporation will be insuring these SHGs via the Janashree Bima Yojana, which offers life and permanent disability cover to people in 44 categories. Around one crore lives have been insured under the Janashree Bima Yojana this year. According to the Finance Minister, only 35,000 SHGs have been covered so far under this scheme. The Government will give Rs 500 crore to the corpus of the fund. The corpus under LIC''s social security fund currently stands at Rs 700 crore and with the latest allocation it will stand increased, at Rs 1,200 crore. The Government also mulls to make an additional contribution of Rs 1,000 crore under the LIC''s Aam Admi Bima Yojana for covering landless workers in 2008-09.

LIC Premium Payment Facility Via Aponline

As part of customer friendly initiatives LIC is introducing payment of life insurance premium through APOnline, the digital portal of the Andhra Pradesh Government. Life Insurance Corporation of India, the largest Life Insurance Company in India is retaining its No.1 position consistently as the premier financial institution in the country. LIC has 22 Crores Policy holders of which about 2 crores are from Andhra Pradesh. Life Insurance Corporation of India (LIC) has now facilitated the payment of insurance premium through APOnline at over 1300 franchise centres located across Andhra Pradesh. This will add a new dimension of convenience to the crores of LIC policy holders across the state.

APOnline''s partnership with LIC is significant as, till now, policy holders could pay their premiums directly at any of the LIC branch offices / Satellite Offices / through Internet using their net banking account of select banks / through arrangement with certain banks like Axis Bank / through the ATMs of Corporation Bank or Axis Banks etc. APOnline is a Joint Venture between the Government of AP and Tata Consultancy Services. APOnline is an integrated web portal that operates in a franchise model and offers multiple citizen services and aims at facilitating e-governance.

LIC Revises Gratuity Of Agents To Rs 2 Lakh

Chennai: The Life Insurance Corporation of India (LIC) has reworked the gratuity payable to agents to Rs 2 lakh from Rs 1 lakh earlier. The revised rates will be applicable retrospectively from April 1, 2007. The Life Insurance Agents'' Federation of India, the apex body of LIC agents, has been demanding that agents'' gratuity benefits be brought on par with that of LIC staff. At present, an agent can avail of a maximum of Rs 1 lakh as gratuity benefit as opposed to Rs 3.5 lakh for LIC employees.

Gratuity admissible to an agent shall be at the eligible rate for each qualifying year for the first 15 qualifying years and at half the eligible rate for the subsequent 10 qualifying years, provided the maximum amount of gratuity payable shall not exceed Rs 2 lakh, LIC said in a communication to its zonal managers and others on February 12. For instance, bancassurance channels have grown rapidly at 30-40 per cent year-on-year. The entry of the private sector has added a new dimension by introducing several incentives, including foreign trips for agents performing well. Of course, LIC has a semblance of such incentives only for agents who are top performers. As of now, LIC agents receive commissions ranging from 14-35 per cent for traditional products depending on the sum assured and only 2 per cent for investment products. In the case of renewal premia, the commission is around 5 per cent. Last year, LIC handed out Rs 6,000 crore in commissions to agents.

LIC Witnesses Steady Growth

Hyderabad: The bancassurace business of Life Insurance Corporation of India (LIC) is on a firm growth, thanks to the growing interest of many banks in enhancing the fee-based income. Led by Andhra Bank in the number of policies and first premium income, 26 banks in the country are currently eyeing a niche in bancassurance by selling insurance products of the State insurer. While Andhra Bank has been ranking number one in the number of new policies and first premium income for the last two months, there is renewed interest among other banks to drive big business. The number of polices sold through the bancassurance channel registered an increase of over 60 per cent in the first three quarters of the current fiscal compared to the corresponding period of the last fiscal year. However, LIC''s new business via bancassurance was about Rs 475 crore so far in the year. Andhra Bank, UCO Bank, Corporation Bank, Central Bank of India and Dena Bank are currently the top five banks in LIC''s bancassurance business as on January 31, 2008 as per the figures released by the corporation

LIC Looks To Mop Up Rs 750cr

Kolkata: Life Insurance Corporation of India (LIC) has decided to raise Rs 750 crore by the end of this fiscal, from Eastern region through its maiden stand alone health insurance scheme, Health Plus. LIC is eyeing a first year premium income of Rs 5000 crore for the fiscal from its east zone operation. Health Plus is the first long term unit linked health insurance from the company and it combines health benefits to entire family (husband, wife and children) in a single policy providing daily hospital cash benefit, major surgical benefit and domiciliary treatment benefit. The premium allocation charges for the first year would be 30 percent and 6 percent in the subsequent years. One of the main features of the policy is that the premium remains unchanged through the tenure of the policy.

The policy provides withdrawal of fund equivalent to the actual expenses incurred in respect to the domiciliary treatment after three years as this component is dependent on the capital market. Hospital cash benefit benefit is payable on a daily basis in case of hospitalisation and it ranges between Rs 250-2,500 for the principal insured. However this benefit does not include the expenses incurred during the first 48 hours of hospitalisation. During the term of policy, this benefit shall be available for 365 days for each member.

LIC Enters Health Insurance

Mumbai: Life Insurance Corporation has rolled out its first health insurance product, which is also the first unit-linked health policy to be introduced in the market. The plan combines health insurance for the entire family (husband, wife and the children). It offers hospital cash benefit and major surgical benefit along with a Unit Linked Insurance Component that is specifically to meet the domiciliary treatment-related expenses for the insured members.

The hospital cash benefit per day ranges from Rs 250 to Rs 2,500 for the principal insured and up to Rs 1,500 in the case of a spouse or a child.This benefit is, however, payable only for the period of hospital stay in excess of the first 48 hours.The major surgical benefit is a lump sum (of up to Rs 5 lakh) which could be a specified percentage of the sum assured depending on the type of surgery. The premium allocated to purchase units will be invested in a Health Plus Fund. A minimum of 10 per cent and a maximum of 50 per cent will be invested in equity. If a customer pays Rs 15,000 in premium per annum, Rs 1,614 would go towards health insurance charges. After deducting an allocation charge, the balance would be invested in the Health Plus Fund.

The insurance cover can be renewed until the age of 65 and at the end of the policy term, the balance in the policy fund is payable. The benefits continue even in the event of the death of one of the members.

LIC Ties Up With Aponline

Hyderabad: Life Insurance Corporation of India, South Central Zone, has joined hands with APOnline for premium payments in the e-Seva centres in Andhra Pradesh. The policy holders can now pay the premium in over 700 e-Seva centres in the State. The initiative is part of its concentration on alternative channels of premium collection. The South Central Zone, comprising of Andhra Pradesh had collected Rs 40 crore premium (in the first nine months of current fiscal) via alternative collection channels, including banks and electronic clearing system. The facility will be extended to more e-Seva centres soon.

LIC Plans To Build Up Realty Portfolio

New Delhi: Life Insurance Corporation of India (LIC), India''s largest life insurance company, said it mulls to consolidate its real estate portfolio across the country. Expression of Interest is being called from professional consultancy organisations for consolidating our real estate portfolio, LIC said in an advertisement. The consultancy entails a feasibility study, including techno-economic viability assessment of expected growth potential and investment opportunities in sectors such as commercial, housing and retail for fresh acquisition. LIC is interested in buying properties in Tier I and Tier II cities for its own use and investment purposes. The insurer will develop unencumbered plots at Kolkata, Jaipur, Chennai, Kanpur and Ahmedabad.

LIC entered into the real estate business in 2005 in an attempt to get more returns from its properties. The last date for submission of bids is January 25. It achieved a solvency margin of 150 per cent as on March 31, 2007, by building reserves of Rs 36,472 crore. The state-run insurer targets to collect first premium income of Rs 52,000 crore this year compared with Rs 39,541 crore in 2006-07. It has aimed a total investment of Rs 1,17,000 crore for the current fiscal compared with Rs 90,000 crore last year.