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Retail focus is the need of the hour: LIC MF chief

NS Vageesh Mumbai | Updated on January 09, 2018

‘Exploring the possibilities of exploiting the synergies that exist with the parent LIC’

Raj Kumar, CEO of LIC Mutual Fund, is conscious that four of his five predecessors, who came on deputation from the parent, LIC, had a tenure of just about a year at the helm.

The rapid turnover at the top has had a bit of a negative impact on the organisation, even though there is a board of directors to ensure continuity and policies are not changed abruptly.

Raj Kumar who is also a veteran from the life insurance industry having spent 33 years with LIC, says that a CEO needs a term of between three-four years to make a mark. But with CEOs deputed from the parent organisation, depending on seniority and vacancy, that has not always been possible to do. Changes and consolidation need time, according to him, and he plans to talk to his boss, the LIC chairman, on the subject soon.

The six months that have elapsed since he took over has been spent in understanding the nuances of the mutual fund industry and his own organisation. He is convinced that the potential of mutual funds is still waiting to be discovered.



Aims to gain top spot



The LIC MF which is the 17th ranked player in a 43-player industry has chalked out a plan to turn things around and gain the top spot in industry rankings. Its assets under management has touched ₹25,000 crore and it is expected to cross ₹30,000 crore by March of next year. Equity funds constitute about 10 per cent of the total AUM with about ₹2,600 crore under that category. The industry is nearing ₹22 lakh crore in AUM.

Raj Kumar says a retail focus is the need of the hour and concedes that creating a network will take time. He is now exploring the possibilities of exploiting the synergies that exist with the parent LIC by meeting its officials, development officers and potential distributors to help increase the reach of LIC MF. The fact that the insurance industry has about 23 lakh agents and that LIC alone has about half of them makes it imperative to reach out to this untapped source, according to him. The number of distributors in the insurance industry is many multiples of that currently available in the mutual fund industry.

It has not, however, been a very easy path, since insurance advisors and agents often tend to see mutual funds as competition or as something that will cannibalise their existing business. Raj Kumar says that his focus will be on removing that misconception and make it a win-win proposition for these agents. Addressing the issue of higher compensation being offered by the insurance industry head on, he says that his selling pitch to the insurance distributors and agents will simply be that they can sell additional products that meet different needs of the customer and increase their income.



Prioritising key areas



He looks to recreate his earlier experience of transforming the Gorakhpur region of LIC (jumping to third rank from 99th rank in performance) as a top performer by prioritising key result areas, holding town hall meetings, visiting all branches, overcoming scepticism, empowering staff to speed up decisions, and connecting with customers. That’s a formula that will probably need to be used once more if LIC MF has to reach the top.

Published on November 27, 2017

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