‘With competition around, LIC has reinvented itself’

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: Life Insurance Corporation, a public sector behemoth set up in 1956, is facing a tough competition from new life insurers on all fronts. DK Mehrotra, managing director, LIC in an exclusive interview with FE’s Sitanshu Swain & Kumud Das explain the strategies, the state-owned insurer is devising to protect its turf.

Was Jeevan Aastha, which collected Rs 10,000 crore instead of the targeted amount of Rs 25,000 crore, a failure or a success?

If I had not created a hype that we could collect Rs 25,000 crore, then I would not have been able to reach the real goal.

I was happy to create a marketing gimmick. If I had not created a hype in the market, then my agents also would not have become so aggressive. And my people down the line would not believe it to be a very strong product. So, they would have become very low on their aggression. Internally, we had thought that sustaining the rate of 9%-10% of simple interest over a period of 10 years was great. So we had thought that if we would cross Rs 13,000-crore mark we would close it.

Do you think you can repeat the feat with your new product Jeevan Versha?

Jeewan Astha was more a metro kind of product with the premium amount being as high as Rs 25,000. So we thought to have such a product with low premium of Rs 15,000 as well to tap the rural market. The new product is basically aimed for the rural belt.

How has the response been?

The response has been very good as we have been able to sell about 36,000 policies so far. Our other policies are also doing equally well in the rural areas. For example, even the unit linked insurance plans (Ulip) products are doing well in rural areas. To include, ‘Jeevan Saral’ and ‘Jeevan Anand’ are the two products which are also doing well in rural areas.