‘LIC to relaunch Ulips, home loan covers soon’

MUMBAI: Life Insurance Corporation (LIC) of India is the largest financial institution in the country with assets under management of over Rs 20 lakh crore. Although the corporation has seen a sluggish FY15, it is set to bounce back during the current fiscal with the launch of several new products. In an interview with TOI, chairman S K Roy speaks of how LIC has added 1.5 crore new customers under the Prime Minister’s social insurance scheme.Edited excerpts:
How is business turning out in FY16 compared to FY15?
FY16 has started on a positive note. The corporation — as up to May 31, 2015 — is showing growth of almost 21%, both in policies as well as first-year premium. Group business is doing well and we are poised to achieve more than Rs 10,000 crore new business premium income in the first quarter, which is a growth rate of 50%, and forms more than 30% of our FY16 budget. This will also improve our market share.
What are the new products in the pipeline? Any products for online?
Our maiden Ulip product, after the new guidelines, is on the cards and shall be launched soon. We plan to reintroduce insurance cover for housing loans very shortly. Currently, we have two plans on our online platform: One is our e-term plan and other is annuity plan Jeevan Akshay VI. We are planning to expand our online products portfolio, especially in the space of protection and health products.
Under the Prime Minister’s Jeevan Jyoti Bima Yojana (PMJJBY), we have already enrolled more than 1.5 crore savings bank account holders. The premium collection and claim settlement for PMJJBY are through a dedicated web service. We have also reintroduced single-premium group insurance scheme which covers long-term loans.
Has LIC been successful in migrating to ECS mode for payment of policy benefits? What are the savings in operations?
We have migrated to payment of policy benefits electronically through the NEFT (National Electronic Funds Transfer) process. For the financial year 2014-15, we have made 2.77 crore policy payments through NEFT, which has resulted in saving time in terms of manpower, cost of issuing and despatch of cheques, and other costs.
Your credit card was launched to make transactions easier for policyholders. Now with everyone having a bank account and multiple payment options, what are your plans for the cards division?
A bank account and credit card are not two mutually exclusive products. Rather, they work in unison to complete the financial inclusion of a person. The requirement of a person does not merely end with the opening of a bank account. We propose to continue our endeavour in credit card. However, LIC is technically equipped to cater to both the requirements, i.e., to use a bank account and a credit card as a tool for payment of premium. A person not having immediate access to cash uses his credit card to pay the premium and, thus, helps LIC in maintaining a healthy and persistent ratio.
What initiatives have you taken in terms of digitization?
The process of digitization of policy records started in 2007 with our Enterprise Document Management System (EDMS) and, as of now, we have digitized approximately 700 crore documents containing policy bonds, proposal forms and annexures. These records are made available at all branch and divisional offices of the corporation. As a result, a policyholder can pay premium anywhere in the country.
As per the revised guidelines on insurance repositories and electronic issuance of policies dated May 29, 2015 issued by (sector regulator) IRDAI, the policyholder has the option to ask for a demat policy and we are exploring all possible options in this regard.
Do the new smart cities announced by the government provide an opportunity to invest in real estate?
LIC has acquired development rights of approximately 2 lakh sq ft built-up area in Gift City at Gandhinagar.
RBI says that 13% of bank assets are stressed. Is LIC also feeling the pain?
The gradual improvement in the economic environment may help in recovery of industrial growth and it is expected that it will trigger easing of some stress on asset quality of the banks and, with the improvement in the asset quality, it will become the strength of the banks. The corporation has invested in good quality banking stocks (public and private banks) and we are continuously reviewing and monitoring our investments.