The Hindu Business Line : LIC eyes Rs 1,000-cr biz from alternate channels

Mr P.K. Tayal (left), Chairman, Bank of Rajasthan, with Mr K. Sridhar, Managing Director, LIC, at the signing of an agreement in Mumbai on Friday. — Paul Noronha

Mumbai , Sept. 16

LIFE Insurance Corporation of India is eyeing new business premium from alternate channels worth Rs 1,000 crore by the end of the fiscal.

In the current fiscal, LIC has garnered Rs 55 crore from alternate channels.

In 2004-05, the PSU life insurer earned Rs 200 crore from alternate channels. Of this, Rs 140 crore came from its tie-ups with banks. However, bancassurance accounted only about 1.6 per cent of the total new business during this period.

Tie-up with IndusInd, BoR

To set about achieving the Rs 1,000-crore target, LIC today tied up with two banks, IndusInd Bank and Bank of Rajasthan.

LIC's tie up with IndusInd Bank involves a group insurance scheme for the account holders of the bank - both savings and current.

The scheme is open to all individual account holders aged between 18 and 54 years maintaining current and saving accounts with IndusInd Bank.

LIC also seeks to tap the NRI customer base of IndusInd Bank by offering a cover of Rs 3 lakh. The premium for this product will range between Rs 172 and Rs 888 depending on the age of the customer.

LIC has so far insured 5.5 lakh lives through similar group insurance tie-ups with nine other banks. Of these, Andhra Bank has topped with four lakh lives.

Mr K. Sridhar, Managing Director, LIC, said that the insurer has also developed a product especially for bancassurance, which is awaiting approval from IRDA. This will be modelled like an over-the-counter product and have features that will require less of explaining - something that will interest banks, he said.

IndusInd Bank's target

Mr Bhaskar Ghose, Managing Director, IndusInd Bank, said the bank had set a target of covering five lakh lives in the first year. "We plan to get into wealth management in a big way," he said.

The bank would finalise its plans to bring out a GDR by December-end.

In yet another tie-up, Bank of Rajasthan moved from its earlier bancassurance partner - Birla SunLife to LIC. Mr Pravin Kumar Tayal, Chairman, The Bank of Rajasthan said that the size of LIC, its popularity in rural areas as well as the wide range of products had prompted the move.

Among all of LIC's bancassurance partners, currently UCO Bank garners the maximum premium. LIC's tally with respect to tie-ups with banks has now gone up to 34.

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