Life Insurance Corporation (LIC) intends to increase its market share of non-participating business as well as diversify the channel mix while ensuring that its agents stay as the main distribution pillars of products, chairman M.R. Kumar has said.

In the annual report for 2021-22, Kumar said LIC has a dominant business mix coming from the participating business (par products). For the last financial year, share of par business within the overall individual business, in terms of annual premium equivalent (APE) was as high as 93%.

For FY22, the insurer’s annual premium equivalent stood at Rs 50,390 crore. “We believe our aggressive diversification by adding more non par products suited to customer needs will yield the desired results,” Kumar said.

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The company has 17 individual participating products, 17 individual non-participating products, 11 group products (including one credit life and one annuity product) in its portfolio, along with 7 rider benefits, according to the annual report.

“The product mix is heavily tilted towards participating businesess. Changing this is a big task for us and we have already started,” Kumar had told mediapersons after declaring LIC’s Q1FY23 results last month. Accoring to analysts, scaling up of high-margin non-participating business beyond a certain level could be a challenge since the company’s agents have been used to pushing products that leave policyholders a significant share of their surplus.

Currently, over 95% of LIC’s individual business in terms of premium is sourced through its agency force and less than 3% is through bancassurance channels. The agency strength is around 1.33 million, and a large section of which is working in the rural areas of the country.

Kumar said the life insurance company intends to sharpen the focus on bancassurance channel to steadily and considerably increasing its volume and thereby its share in its overall business. “Our ties up with banks continues to be robust. We intend to work with all partner banks and at the same time strengthen the IT processes between the banks and LIC,” he said.

Having more synergy with banks’ base clientele, classifying them into identifiable segments by understanding their specific needs and targeting them accordingly will define the business growth in future and bring in more number of policies with commensurate ticket size, the chairman pointed out.

LIC posted a growth of 6.31% in weighted received premium (WRP) for the last financial year, with the total first year premium (FYP) increasing by 7.92%. Group new business premium saw a 12.66% increase, while number of new policies grew by 3.56% over the previous financial year.

Its market share stood at 63.25% in total first year premium for FY22 and 74.62% in the number of new policies.