warm welcome to all of you for this Information sharing session. This gathering is at a juncture when all the LICians are working incessantly at their respective workplaces, in their roles to raise the bar of their achievements and take the Corporation to the heights envied by all other players in the industry. I feel that the blooms on mango trees have some invigorating effect on us under whose influence all seemingly impossible targets surpassed in the last quarter. I believe this year again we are going to create history with achievement of FP budget in February which is an all time record. I appreciate this spirit and endurance of the team LIC and its capability and confidence to take the challenges head-on.
Before coming to our performance during the year, it would be pertinent to sneak a quick look at the economic environment around us, influencing us directly or indirectly.
Even events in global arena should be watched closely because at increasingly
interconnecting world makes countries vulnerable to events in distant lands. Seven years after the American subprime crisis shook the world economies including ours, economic shocks keep coming. The Year 2016 witnessed several events that ended up impacting global economies for good and bad. The Year 2016 started with crash in China’s stock market. Then we witnessed Brexit, an event which left European union and Britain into an uncertain future and the year finally ended with an unconventional
presidential candidate coming to power in US. The potential economic impact of Brexit will depend on the terms of exit and may be evaluated in future. The impact of Trump’s economic policies will have a direct impact on us. So, we need to be alert.
Asia’s mega economies, India and China, are increasingly being powered by
consumption boom, providing Asia an additional line of defence if global growth is not as expected and trade tensions boil over.
Indian economy is powered by consumption and is set for another structural boost. While the complete effects of demonetization are still in play, consumption is expected
to continue its driving role in 2017 because of three fundamental factors: Rising wages where public sectors are leading the way, a boost to rural incomes due to many government initiatives and a structural push from taxation reform in which GST will be the most important leap. Government’s focus on Transparency, Digitization and
eradication of corruption will further ensure resilience in economy.
If we analyze the performance of the Insurance industry in the past, it seemed to be coming out of stagnation during 2015-16 by showing 11.84% growth in Total premium whereas our growth was slightly lesser than the industry average (11.17%). I believe that current year we will lead the industry from the front. We are showing growth in new business income and agency strength which is having an impact on overall growth
If I review the business figures upto date, it evokes mixed feelings. Achievement on FPI parameter is approx 99% which gives us reason to smile whereas our performance on NOP is just above 50% which warrants our attention. On the growth parameter, focus is required on policy count to pull it from de growth territory. Growth in agency force is
showing revival and this may be leveraged to address the concern about the number of policies degrowth. I believe that everybody will have taken a note of these trends and acting upon to ensure V shaped upturn.
Our market share on FYP count as on 31st January has been 71.20% which has improved over last year. However, market share on NOP is 74.65% which is slightly lower than last year. Share in Individual assurance is only 54.64% which should be the area of focus.
Our performance on claim settlement front has been satisfactory and we have settled approx 1.37 crore claims till 31.1.2017 with a speed ratio of 97.39% in death claim settlement. I congratulate all of you for this.
I take this opportunity to reiterate that our core activity is ‘spreading life insurance’ and all other activities whether it is servicing or technical are aligned to support the core activity. Each one of us, at any place or in any stream must focus on this ultimate objective. Growth in business should be the aim for all of us and we need to leverage
our position and each opportunity to contribute towards this aim.
Friends, we are part of an historic moment of the development of our nation. India is in an unprecedented growth era which provides us innumerable opportunities to express
our capabilities as individuals and our potential as a team. All our achievements of the past are commendable but if we look at the opportunities that were available to us, we find that we have not harnessed them well.
I want to share one sample data with you to introspect:
Our new business premium growth during last five years has been in negative territory whereas household saving and financial savings have grown by 30% and 43% respectively during the same period. This shows that surplus money was available with people. The intention of investing in financial instruments has increased but we are
unable to capture our fair share in that surplus investible fund. This gives all of us food for thought.
I believe that this lag is not because of lack of efforts but probably due to
transformation in the market where our intuition as well as strategies which have
served us well in past are gradually becoming less effective. The new waves of change are far tougher, outpacing the speed of past decades. Initiatives, innovation and improvement demanded by the market force, have not proved to be adequate. Social scientists and behavioural economists find that we human beings are biased towards
the status quo and resist changing our assumptions and approaches even in face of evidence. Businesses of the companies thrive which understand the depth, breadth, radical nature of the change and opportunity that is on the way are best inclined to reset their insights and strategies accordingly.
One evidence, I want to bring to your notice is about our changed business mix. Our Group insurance premium has surpassed the Individual premium by a big margin. This is testimony enough that times are changing and we have to change with time.
On closely analyzing the issues before us, I feel Higher average age of our sales and
administrative teams is the first issue that needs to be addressed. Even in an
increasingly digitized world, an agent is still the first touch point with the customers. A young and vibrant youth with agility and continuous learning, will create a different impact on the new generation customers. We have to target to bring at least 5 lakh youths under the age of 30 years, to our agency fold in coming year. This will be an immediate step towards ‘Younger LIC’.
Nowadays, current practices are being challenged in the court of law and many a times looked with a different perspective by the judicial system. Similarly, regulatory changes
are happening quickly and regularly. This again warrants more agility in our action and proactiveness in the thought process.
‘Agility’ is the key not only for coping up with regulatory changes but also for
maintaining our growth line. I urge upon the people to be agile and not to look up to their seniors for all strategies but take up such challenges themselves because a uniform strategy will not entice all the customers. So rather than thinking of a national market, our people must comprehend a country where offerings may vary from one city to another, as well as by distribution channels and demographic segments. All this will
place a premium on agility.
Another key to remain germane in such a transforming era will be: ‘Reinvention’.
Reinvention in our processes, strategies and approach may keep our iconic position intact. In the past, we had been swift in anticipating the challenges of the future and suitably reinvented ourselves. Our First major reinvention drive was in the form of nationalization and merger of all life insurance companies into one.
Next reinvention in the form of OIC in 80s’ made us what we are today. History would have been very different without such reinventions in the past.
That reinvention made us the first mover in terms of taking servicing nearer to the
customers. I feel, that somewhere in between we have been missed the speed of changes and expectation of our customers. We made incremental adjustments whereas market demanded radical changes.
Now at this juncture, it’s the time to reinvent again. We have to innovate, find new strategies and employ technology to its fullest to enable such strategies.
Present reinvention would not be possible without the help of technology. According to the old mind set, technology was a tool to cut cost and boost productivity but now technology
in the form of digitization, has taken a massive leap forward and has become a
disruptive agent. It can now help businesses to gain scale with stunning speed and also shorten the life cycle of established companies.
Our Honorable Prime Minister in a letter to me, urged us to work shoulder to shoulder to :
• Eliminate corruption and black money
• Transparency in economic transactions
• Ensure that fruits of development reach the intended beneficiaries
• Use as many digital means as possible for economic transactions.
This letter was published in ‘Yogakshema’, February 2017 issue.
We have been the harbingering to bring computers into the industry. We will again lead the way towards propagating digitization and transparency in our transactions.
We have ED (IT) here with us who will tell us about the technological initiatives that we are going to take in future. Everyone is requested to listen to him and go hand in hand with the latest technological initiatives to avoid obstacles in future.
On the front of employees’ engagement, several steps have been taken by HRD and Personnel department to keep the employees equipped and adequately compensated. I can say that our monetary compensation is very competitive and learning opportunities
are immense. On non monetary front, association with brand LIC has got no parallels in the insurance market. Above all, the mission of providing financial security to the families in distress, with whom all LICians are associated with, in itself is enough reason to be proud of.
The Corporation is doing its best to keep up with today’s time and is swift to
respond/swiftly responding to the demands of the market and customers. We are using customers’ convenience and expectations as a guiding light for growth as well as preparing a leap into a digital era. We are taking initiative to challenge the status quo and adopt a more analytical and scientific approach (Staff strength formula) while reviewing the existing processes. We are determined to enhance the customers’
experience at all touch points and are taking all possible steps to remain ‘Insurer of choice’ for all the customer segments as well as at all demographics. However, I feel that continuous change in attitude will be the key for coping up with the rapid changing expectations of the customers.
Finally, I want to assure all of you that the steps being taken by the Corporation have got only twin objectives: Growth for LIC and LICians. In the past all such initiatives have been discussed at length with you and all the suggestions adding value to the objectives have been incorporated. Further, I stress upon that initiative like ‘two factor authentication’ has only one objective in mind: safeguarding our people from
impersonation, as increasing technological advancements require enhanced security. I am happy with the pace of implementation and believe that pan India implementation
will be completed well within the scheduled time.
My friends, some of our important choices have a timeline. If we delay a decision, the opportunity is gone forever. And/Thus we cannot afford to miss the opportunity of being part of our country’s growth story.
Let us come together, let us embrace change with fondness because change is the only way to keep our superiority unchanged.