18/11/2014
LIC has gained from competition, ready for higher insurance FDI, says Usha Sangwan, MD, LIC
18-Nov-2014
Source : The Economic Times
Life Insurance Corporation (LIC) may have lost its market share marginally in the first half of this fiscal, but the state owned insurer will bounce back very soon with new products in segments, including health insurance, says managing director Usha Sangwan. The first woman to hold the post, Sangwan, who holds a degree in economics and human resources from Panjab University, tells Sangita Mehta in an interview that LIC has only grown in the face of competition from the private sector and is fully geared to meet increased competition as a result of higher foreign direct investment in the sector. Edited excerpts:
Do you agree with the market perception that LIC could have done better if it had ULIP in its bouquet?
It’s just a market perception. We have a good bouquet of products - we have investment products and traditional products. All the segments and needs of customers are being catered to. So, we don’t feel that lack of any products or addition of any product will make a significant difference. But I can say that we will be present in all the segments.
Why is LIC not seen as an aggressive player in health insurance?
Our share in health insurance is very insignificant. We started late on health insurance. Also, traditionally, health has been with non-life insurers. Yet, the share of life insurance companies selling health products is 57 per cent. Non-life insurers provide indemnity products wherein if a person is hospitalised, some percent of expenses is reimbursed. But in life insurance, we insure for a specific amount whatever the expenses and whether claimed under mediclaim. Irrespective of that, we will give that sum assured... So, our product not only covers hospital cash benefits, but also major surgical benefits.
What are LIC’s plans for health cover?
We see there is potential in market - hardly 25 per cent of the population is covered - and we also see medical costs are going up like anything. Coverage is very little. So, there is a market available. We will definitely look at this segment with a very positive outlook. We have a separate vertical looking at health insurance, which will be strengthened in times to come and we will have new products in health insurance.
How has LIC’s experience been in insurance repository?
IRDA’s ultimate objective is one-point contact for customers and to have the policy in demat form which is easy to handle. We have some technical issues which we have taken up with IRDA. LIC has already digitised all 30 crore policy records. For LIC, it is not a problem to give any service online. A customer can view premium payment dates, pay online, register any complaints online. Looking at it conceptually, it’s a good idea. But putting the system in place, building processes and then taking it forward will take some time. If I join for my online customer, the offline customer will pay, so we can’t cross-subsidise. Conceptually, we are okay with it, but the process part should be cost-effective for the customer and for the company.
