Life Insurance Corporation of India (LIC) has started selling channel-specific insurance policies in a bid to widen its distribution base. The life insurer predominantly depends on its large base of 13.3 lakh agents to source new business.
During the April-June quarter of 2022-23, the share of individual new business premium sourced through agents was 97 per cent with bank assurance and alternate channels including direct sales constituting the remaining 3 per cent.
Growing the alternate channels has been a challenge for the country’s biggest life insurer unlike private players, many of whom already have the backing of banks. “For the first time, we have launched a channel-specific product — LIC’s Bima Ratna - and this is only available for the bancassurance channel,” LIC chairman M.R. Kumar said at the Q1FY23 earnings call with analysts.
“During the quarter we did complete the test run of our system integration with Policybaazar and we have achieved a soft launch. Kumar also said that agency recruitment at LIC has started to pick up the pace, as well as the number of policies sold through agents. As of June 30, 2022, the total number of agents under LIC’s fold was 13.32 lakh compared with 13.26 lakh as of March 31, 2022.
The agency force sold 35.94 lakh policies during the quarter ended June 30, 2022, registering an increase of 60.78 per cent. Kumar further said that the insurer is looking to introduce more non-participating policies (two new products launched during Q1FY23). LIC is also looking to train its agency base to sell more non-participating policies with defined benefits.
“Today we have more nonpar products than par. We have started training all the agents - giving them an idea about the interest rate scenario. “We have 13 lakh agents, many of whom are in tier 2, tier 3 cities.
“We are giving them a sense of why protection-savings kind of product is far more important from the customer’s point of view rather than the bonus par policies that we have been selling,” Kumar said. The insurance giant is keen to re-enter the mediclaim segment as and when the regulator provides clarity on the issue, Kumar said.
