Nandini Goswami

Kolkata: Being both, the biggest player and fastest mover in an industry is a difficult task.

Life Insurance Corporation (LIC), which slipped in growth and market share in 2007-08 is retooling its strategy for this year.

The state-run life major projects a 35% growth in premium income to Rs 57,000 crore this year. While a number of conventional products will be reintroduced, new products from the LIC stable are also expected to hit the insurance space in the coming months.

In the last one year, LIC saw its gross premium grow just 6%, which came on the back of a 118% growth in the previous year. The insurer’s market share also fell to 60% in the course of last year.

LIC does not see the performance as a negative. “Yes our growth levels did decline. But, honestly for an organisation of our size, a 25-30% growth would have been reasonable,” managing director D K Mehrotra told DNA Money. “ The year 2006-07 was exceptional as there was this euphoria on unit-linked plans and the growth was phenomenal, which translated to an over 100% growth,” he explained.

“We had a mid-course correction last year and our new business premium growth of 10.8% on a 118% growth the previous year was reasonable. But considering the number of policies, conventional plans sold 1.8 crore policies, whereas unit-linked plans sold 1.9 crore. The ticket size for conventional plans is around Rs 3,400 compared to Rs 20,000 for an unit-linked plan,” he said. Almost 82% of LIC’s premium came from unit-linked plans.

Is there a cause for concern on premium growth and market share?

“No we are not worried on the premium growth and we’ve projected a 30% growth in premium and a 15.7% growth in policies this year. The intention is to grow higher than the industry growth and also to bring down the ulip to non-ulip ratio to a reasonable mix of 70:30 this year. But we are anxious about market share. With competition, it is perhaps difficult to revert back to our original market share but we will strive for a 70% share this year,” Mehrotra said.

LIC is also readying itself to give an extra push to conventional plans. It is likely to reposition some popular plans like Jeevan Anand, Jeevan Tarang, Jeevan Saral. Having sold 8.5 lakh micro-insurance products, the company has budgeted 10% business from this category alone.

LIC is planning 4-5 new products, including a pension plan and health insurance variants. Some of the policies have already been filed with Irda.

Source : DNAIndia