How will the entry of foreign companies influence the Indian insurance industry?
The general perception about the emerging competition is this: there will be a variety of insurance products, quality of service will improve, yields will be better.

The whole idea behind opening up the insurance sector is to encourage competition. For the last 43 years, we were the only players in this industry. Naturally, new Indian entrants feel they need the help of foreign majors to compete with us.

Is LIC thinking about forging a collaboration with foreign players to improve its service?
We don't need partners. Most private players need partners for two reasons. They want more capital and greater expertise. We have both of them. Even if we do not have any expertise in a particular area such as technology and fund management, we would go ahead and hire talent. We might seek the help of experts, but we will not go for partnerships.

Are you currently talking to any foreign player for a strategic alliance?
No, currently we are not talking to anyone for a strategic alliance.

What is LIC's evolving strategy to face the coming competition?
We are working at new products for different segments of the society. In a bid to provide better customer service, we have already upgraded our technology. Online operations have been introduced in 99 per cent of our branches. Metro area network has been introduced in Delhi, Mumbai, Chennai, Bangalore, Pune and Ahmedabad.

We are planning to introduce a similar network in Hyderabad and Calcutta, sometime during April or May this year. All these centres will soon be linked through wide area network. Plans are afoot to install as many as 50 information kiosks with touch screens all over the country in the next few months. In all, we intend to spend between Rs 50 and Rs 60 crore every year. We have already spent more than Rs. 200 crore for technology upgradation.

Are you looking at the Internet as a business development tool?
Even abroad, insurance marketing through the Net is not successful. Not just that. In India, cyber laws have to be put in place to enable selling insurance products over the Net. Currently, we are using the Net to offer information about our insurance products.

While LIC is governed by the LIC Act, the new breed of insurance companies will be regulated by the Insurance Regulatory Development Authority (IRDA). Will this lead to an uneven playing field between LIC and the new players?
Every player in the insurance industry should operate on a level playing field. I am sure the government will take care of that. At the same time, what should be ensured is that there is no conflict between LIC and IRDA. From our perspective, even we would like to have a level playing field.

Why is the yield on LIC's investments low at just 12 per cent? At 14 per cent, even GIC's yield on investments is higher. Your comments?
Perhaps GIC's investment pattern is different from ours. A large chunk of our investments, more than 75 per cent, is in the social sector where yields are low. Only a small portion has been invested in the corporate sector where yields are high.

Are you planning to improve your yields? How do you propose to achieve that?
We have to operate within the framework of government guidelines. However, we are continuously working at improving our yields through better fund management, increased equity exposure and timely purchase and sale of equities.

Do you expect a change in the pattern of investments for insurance companies?
It is in the hands of IRDA to come out with new investment policies.

Which are LIC's most preferred products?
Our endowment and money-back policies are the most preferred products in the market.

Why are pension and health care schemes not very popular in India?
Awareness is a very important factor for the success of any scheme. Pension fund is a new concept in India.

Traditionally, Indian society has been joint family-driven. So, the need for pension funds has not been felt. Though pension funds are not around, there are schemes such as provident funds with similar benefits. I feel there is tremendous scope for pension schemes in India. The performance of LIC's pension products proves this.

Do you plan to launch pension funds?
Even now we have pension plans. Our Jeevan Suraksha is a pension plan. It was launched in 1996-97. We are working at similar plans to suit everybody's needs.

What are the new products you are planning to launch?
Currently, we are designing unit-linked and unbundled products. We have just launched four plans in the market. Last year we launched our Bima Nivas plan, which was a huge success. Our premium target for the year is Rs 350 crores, but we are likely to touch the Rs 500 crore-mark in premium income.

How do you assess the performance of your employees?
Individual employee assessment is based on the supervisor's impressions. We assess employee performance based on the amount of policies serviced on a historical basis. Currently, we are growing at between 18 per cent and 20 per cent, which is good.