Ms.Usha Sangwan, Managing Director, LIC spoke to Dr. Rakesh Agarwal and Dr. A. K. Chattoraj
1. What is the impact of demonetisation on the insurance industry?
Ans. Initially, there was a drop in our premium collection for a few days and that is natural to happen as priority of people was shifted. However, as LIC being prudent investor, and abiding with the laws and regulations of the land, necessary instructions regarding premium collection in the changed scenario were intimated to all the offices immediately. Even though the collection went down for initial few days, we were very proactive and vigilant to the needs of the customers, thereby increasing the grace period for the policies where premium have fallen due during the period. This brought relief to many customers and normalcy in collection was restored.
2. As large amount of cash was deposited by people in banks did you feel that it was
an opportunity for you to sell more policies.
Ans. In LIC we are very much conscious and concerned about compliance and corporate governance. We have already rules and regulation in place with regard to AML which precludes misuse of such situations. We have also ensured that the relaxation provided to the customers are not misused and for that matter the action was to support and provide ease in payment of premium.
3. What has been the impact on Direct Selling after digitization, as Life Insurance
traditionally is sold by Agency Model.
Ans. Firstly, as of now, the digitized platform along with direct marketing is not more than 10% worldwide although there are companies, which are opting for purely digitized selling. The segment is growing and growing fast. Secondly, I feel, it is hi-tech and high touch business, which is more sustainable. You can attract a person online but you can give him the choice whether he wants to buy online or offline. The first online product sold by LIC was Pension Product (non-medical). But, in case of medical product you do need some handholding. We leave it on the customer choice. The market is expanding so is the space within.
4. What steps you have taken for Demat of policies?
Ans. We have digitized all our existing policies and the new policies are also being introduced in digital form. Customers can access the same through LIC’s Customer Portal and avail of Online services too.
5. How are Bancassurance, Brokers and Corporate Agency Model faring in
comparison to direct agency model?
Ans. Even now, 90% of our business is coming through tied-channels. However, of late Bancassurance as a model has been improving and it is doing better with companies having captive banks. We have tied up with public sector banks that have not ventured into insurance. However, public sector banks have their own concerns and core areas. I would say we have huge potential to be tapped in this distribution channel.
6. Do you have any plans to launch bank or hospital to leverage your customer
base?
Ans. Right now LIC has investments in Banks .We do not have any immediate plans to launch banks or hospital.
7. What are the efforts and initiatives of LIC in promoting ‘Consumer Awareness’?
Ans. I think if you want to create awareness in India, you have to start with young generation. Keeping this dimension in mind we have taken up various activities for awareness.
We have taken up school activities where we approach different schools and talk about insurance. We have also instituted ‘LIC Student of the Year award’ which is given to the top student every year.
We have also started college activities where we cover colleges across India and talk about benefits of insurance agency as a career option.
For rural area awareness, we have started mobile van activities where a mobile van is sent from local branches to far-off places to educate about insurance.
We also teach about insurance through electronic, print and social media. Lot of awareness activities is thus taking place on the ground level.
8. How do you plan to manage the technology, which leads to disruptions?
Ans. I would say you do not have to manage disruptions; rather you have to observe disruptions and look for taking advantages of the disruptions. For instance, payment gateways – you have to take the advantage of it, e-wallets – you can integrate it in your online platforms. Month on month transactions have increased through online channel by almost 60-70 %. If we observe any disruptions in any sector, we make sure to utilize it.
9. We are moving from customer relationship to customer engagement – How are
you going to leverage your technology?
Ans. We have approximately 300 million customers throughout India and with such a customer base, you cannot engage without technology. Personal touch does matter and our reach helps to retain our valued customers. We have 10 lakh agents, which act as backbone to keep personal relationship with the customers.
Once in a seminar I had asked one of the CEO’s whether he has visited our upgraded website. To this he answered, “I don’t have to go through your website. My agent is so good and knowledgeable; he approaches me whenever a new product is launched and explains it to me, he even visits me when my premium is due”. So many a times human touch is more important than technology. The customer doesn’t wants to leave trusted agents. In my opinion therefore, technology as well as personal touch co-exists.
10. How does LIC differentiate from other companies?
Ans. The single most important factor for LIC is ‘Claim Settlement’. The claim settlement ratio of LIC is 99.74%. Timely Claim settlement is a passion for us and we endeavor that each and every claim is settled. Prompt claim settlement is the best publicity for LIC.
11. The penetration in Life Insurance is still far below in India if compared to
Western Countries. Even after 6 decades what is the reason we are lagging behind
in increasing penetration.
Ans. If you see the purchasing power parity, one should not compare India with the western countries where the purchasing power and disposable income is huge. Having said that, I still feel there is appetite for higher ticket size; people are underinsured or uninsured because of lack of awareness and reach. The Indian market is expanding, evolving, and schemes, such as Pradhan Mantri Jeevan Jyoti Bima Yojana are proving to be immensely beneficial for Indian population. Till now more than 3 crore people have been covered by this scheme. Penetration is bound to increase due to such Government initiatives. The younger generation has enough disposable income which they can certainly use to buy insurance products.
12. What is the focus of LIC on health insurance products?
Ans. We shall be coming out with more innovative and simple health insurance products soon
13. Do you have any plans to open up one-man micro office to increase your reach?
Ans. We already have mini offices all throughout the country. We have covered all towns with population of over 10,000 with our presence in radius of 5 Kms.
14. Misselling of Insurance Products is creating a negative perception of insurance
policy in the market. What are the efforts of LIC to prevent misselling.
Ans. One big step, which the regulator has introduced, is ‘cooling off period’. If the customer is not satisfied with the product he can surrender it within 15 days after receipt of policy and because it is a regulatory compliance, companies have to pay back to the customer. This is one way of stopping mis-selling.
Since companies have to reimburse the money, they take utmost care while selling. The data shows that mis-selling in LIC is negligible. LIC is very sensitive about mis-selling. In LIC agents are professional by and large and if any case comes to our notice we take action against it immediately.
15. How LIC continues to be the trusted brand irrespective of having so many
competitors?
Ans. I think the reason for this trust is customer focus. We are totally focused on claim settlement where we do not tolerate delays and we have strong tracking system to prevent any delay. We are compliant, fair, ethical and possess value along with integrity that adds to our good name. We also have a very strong Grievance Redressal System as a result, number of complaints are coming down with each passing year.
16. What are the initiatives that has enabled LIC to perform well and also to achieve
customer satisfaction.
Ans. Under CRM or customer relationship management initiatives LIC’s e-service was launched in early 2016. This was to ensure quick and prompt access to policy records, payment of premium, policy status, loan status, claim status etc., all these information is now accessible through digital platform.
In keeping with the Digital Revolution in India LIC has made life easy for those who want to transact digitally. The LIC portal and app help LIC policyholders and customers in more ways than one. Starting from locating the closest LIC centres, branches and offices to making payments or calculating premiums, to getting the latest news and updates on policies and news about LIC, it is all now at the touch of a button. The digital platforms are constantly updated keeping the customers and policyholders worldwide abreast with the latest developments in services and products of Life Insurance Corporation of India.
‘LIC Help’ is a simple SMS based feature where when your policy number is sent via SMS, an official will call back to answer your queries. Similarly, “Help Us Serve You Better” was launched in September 2016 where a policyholder contact details are captured to ensure continuous contact.
In addition to all this convenience, one can now make payments to LIC through E-Wallet. Digital payments to LIC through net banking, wallets and debit cards are free of transaction charges. LIC is also working on Online premium payment through Unified Payment Interface or UPI.
Continued focus on customer services, use of technology, reaching out to youth in particular and every segment of society, will help us to further strengthen our Brand.
