Aug 08, 2007 12:59 AM
21923 Views
(Updated Aug 15, 2007 06:14 PM)
It is often said that, you may not find Electricity or Drinking Water in the remotest part of India, but you will surely find an LIC Agent. So famous is LIC that even well educated people associate the term Life Insurance with LIC. So if they have to buy life insurance, they will say "Mujhe LIC karvana hai". Such a powerful brand is LIC. In order to misguide the public, Private insurers are adding the words LIC to their name. For example AVIVA calls itself AVIVA LIC where LIC stands for AVIVA LIfe Insurance Company !
Let me make it clear that I am an Agent of LIC since 2003 in Mumbai and I am 27 years old commerce graduate now pursuing CFA.
I wish to make a note of the Positive side of LIC as well as Negative side of LIC. I encourage other readers to correct me if I am wrong and also add light to any point that I may have missed.
First lets talk about the Positive side of LIC
LIC is owned by the government and therefore it is the only company besides the PPF that has the sovereign guarantee of the govt. of India. It is a different story that today LIC has become so powerful that the govt. leans on LIC every time that the Stock Market crashes. Imagine having an Asset base of over Rs 6 Lac Crore . . thats a 14 digit number ! No company in India can boast of such figures. Mind boggling.
LIC is the only Life Insurance Company making profits. Most of the Private Insurers including the self proclaimed market leaders like ICICI and Bajaj Allianz are booking heavy losses. Check IRDA website in the Annual Report column. The point is that if an insurance company makes losses year over year, then how will they manage to pay the Claim amount? Afterall no Insurance company is here to do charity business.
When it comes to paying claims, again LIC is Number One with the claims settlement ratio of more than 99%. Private Insurers cannot match LIC's ability on claims settlement. Again, please visit IRDA's website to see the claims settlement performance of various companies.
LIC has the world's largest sales force, yes over 10 lac agents and now universities in western countries are trying to study how a company managed to appoint such a large sales force. A sales force of over 1 million ! Truly a remarkable achievement.
Many people argue that LIC has not been able to penetrate the market as it has insured only 15% of the population. My point is, in a poor country like India where there are so many people living below the poverty line, so many people who die of starvation, so many people who dont have access to basic medication, so many people who dont have basic necessities of life like food, shelter, education and clothing. Will such a person first feed his children or buy Insurance ? Lets not forget that a majority of the Indian population is poor and a substantial percentage is living below the poverty line. At a personal level I feel that LIC has done a satisfactory job of insuring people.
# # NOW THE NEGATIVE POINTS OF LIC # #
The Administrative staff in LIC is in deep slumber. Try writing a complaint to them and they wont even bother to reply back. If you ask the Branch Manager for the complaints book, he probably wont have it in place. If an Agent complains against any staff, then the Agent is black listed and next time onwards his work is not done.
In order to show a better performance & achieve branch Targets, Agents are motivated by the Managers to split the policies. This not only adds to the inconvinience of the policyholders but it also increases the expenses of LIC. Competitions for Agents are held with Prizes being offered on the number of policies sold and not on the number of lives insured. Therefore many Agents are tempted to split the policies in order to get better prizes. However if an agent wants the forms or sales literature, most of the time its out of stock. But surprisingly just a week before any scheme is about to close, the office is flooded with forms & sales literature. This is very disturbing.
3, As I earlier said, LIC is lacking in Effective Leadership in recent times. Managers having designations like Marketing Manager or Sales Manager donot have the capability to motivate an audience at a meeting. Yes this is true even in a city like Mumbai. Even the Senior level managers cannot make effective presentations or design a sales strategy. Their only mantra at an Agents meeting is "Friends, bring more policies!'. If you ask them how to bring more policies, they wont know. Its a pity !
Though LIC has more than 2000 branches, they are not systematically located. In Mumbai's Fort area, LIC has more than 20 branches within a radius of 1.5kms. Whats the use ? In the suburbs where most of the people reside, there are no branches at all. LIC has no branches in Bandra East, Khar East & West, Santacruz East, Vile Parle East, Andheri West, Jogeshwari West, Mahim, Matunga, etc. If LIC gives a thought to systematic relocation of its offices, it will immensly help the policyholders.
Even though LIC claims to have taken several initiatives in the IT sector, policyholders still face problems in revival of their policies, payment of premium in several branches, change of mode, change of address, etc. The After-sales policy services department needs to be revamped. Policyholders feel that LIC agents are humble while selling a policy and thereafter they fail to provide any service to the client. The truth is that LIC is so weak in policy services department, that even a good agent finds it difficult to get the work done from the administrative staff.
To sum up, I would say that LIC will never cheat a Policyholder in payment of claim, but at the same time everyone will agree that LIC is not responsive to the needs of the customer. If you have purchased an LIC policy then dont forget to pay the premium on time, and when your policy gets matured LIC will honestly pay your Maturity amount on time.
The employees are sometimes rude in their behaviour with the Policyholder. If a claim cheque is handed over by a courteous and smiling employee of LIC, it will enhance the image of LIC in the mind of the policyholder.
Today LIC is not just an Insurance Company, LIC is a Movement, LIC is a Cult, LIC is a Religion. Imagine 10 lac agents and 1 lac employees serving 16 crore policyholders in India. You cannot deny that LIC has become the way of life in India. Daily you can hear someone or the other talking of LIC in local trains, at fish markets, at restaurants, on News Channels, in your own offices, etc.
As I earlier said, LIC has started lacking in effective leadership. If a company like LIC starts sponsoring irrelevant awards like Zee Cine awards which it had done 2 years ago, then it will send the wrong message in the minds of the policyholders. Imagine India's most famous institution sponsoring a Cine Awards function stating that it was done to increase the brand awareness of LIC. That sounded like a big joke. It is time that the top level officials of LIC come out of their air-conditioned cabins and travel by public transport for sometime in order to feel the pulse of the common man.*
