Kathmandu, January 10:

In tune with the booming economy, the insurance sector in India has been on a phenomenal growth path over the last five years. Last year alone, the sector shot up by 38 per cent, in terms of premiums.

Out of the 14 players operating in the insurance sector currently in India, the Life Insurance Corporation of India continues to be the leader by far.

Despite the arrival of multi-national behemoths and spirited private participation, LIC India has bettered market growth averages by clocking a 42 per cent growth last year, in terms of premiums.

Today it is a $100 billion insurer that boasts of the largest number of customers worldwide with 16.58 crore policies.

Leading the battle on behalf of LIC India has been Atul Kr Shukla, the chairman of the company. While talking to The Himalayan Times, Shukla, who was here to inaugurate the Jeevan Anand policy for LIC Nepal, said that the last five years have been exciting times for the entire insurance sector in India.

“A growing consumer awareness level, booming economy, steadily rising younger generation and rising income levels have all contributed to the growth of the sector,” said Shukla.

LIC India has also gained a greater momentum from the market push. “Alive to the changing times, the company has invested heavily in building up its strength in terms of information technology, human resource and a new flexibility built on the basis of demographic and psychographics variations. This has allowed the company to be able to process 90 claims on an average per minute,” informed Shukla.

For a government-owned entity, it was a big challenge for the company to reinvent itself in the eyes of customers who have tasted the new fruits of economic liberalization and privatisaion.

Apparently, LIC India has been more than successful in doing so. According to an ORG-Neilson-Economic Times survey, LIC India has been named as the most trusted service brand, two years on the run. Last year, Shukla added, in terms of trusted brands, it has been positioned 19 in the overall list of companies.

Recent progresses made in the field of IT has allowed the company to get its 2,048 branches connected on-line, allowing a customer to pay a premium from anywhere in India, irrespective of where a policy has been registered.

Giving further details, Shukla said, “Once LIC’s date warehousing project is completed, it would become possible for a customer to receive payments from any branch.”

Talking about LIC’s Nepal experience, Shukla said that there are a number of areas that need improvement if the insurance sector is to find a firmer footing here.

Corporate tax on insurance here is 30 per cent, which is way too high, even in comparison to India where it is 12.5 per cent only. The government might also look into giving tax exemptions on payments of insurance to encourage more people to opt for policies.

In the light of the fact that investment opportunities are few presently in Nepal, Shukla felt, that it could help fetch better returns for policyholders if insurance companies are allowed to look outside Nepal for investment opportunities.

The other issue that needs a revisit is how to treat the commission being paid to agents by insurance companies, which is being taxed in Nepal. It is a global practice, Shukla said, that such payments are treated as management expenses.

The insurance sector regulator, can also chip in constructively by ensuring better corporate governance and market practices, said Shukla.

Jeevan Anand

Kathmandu: LIC Nepal has formally launched a new life insurance policy called Jeevan Anand in Nepal on Monday.

The policy offers the unique flexibility of full life insurance, as well as an endowment scheme. In case of the untimely demise of a policyholder, all the usual benefits will accrue to the family/nominated member/s. In case of a policyholder reaching the maturity period of a policy, even after receiving the insured sum and all the bonuses due to him/her, the policy will be continued without further payment of premium for a similar amount. The money will be paid to the nominee as and when the persons ensured, dies. —HNS