LIC the country's largest insurer is ready to taken on competition from private players. The company has lined up an improved portfolio and is confidently looking to regain its market share of over 60 per cent and earn new premium of Rs57,000 crore by March.
According to LIC chairman T S Vijayan, LIC's market share slid to 49 per cent in the first quarter but then LIC introduced some new products to address the situation. He said going forward LIC is looking at a 60-per cent market share.
He said the company is geared to collecting the first premium of Rs57,000 crore by the end of the current fiscal even as private players are not sure of meeting their targets in the economic downturn.
He said he still believed that the Rs57,000 crore target would be achieved and added that LIC is not known for target revision mid-way.
Last year, LIC collected first premium of Rs43,800 crore and commanded market share of 63 per cent. However, the market share of LIC declined to 55 per cent in November 2008, with first premium collection at Rs25,220.62 crore.
On the market share decline he said that ULIP had overtaken all other policies till March 2008 but with their analysis of the portfolio in March, LIC decided that that was not the right way of selling insurance in a country like India.
For the first three months, therefore, LIC did not come out with any replacement product and in addition the company withdrew some products in March without introducing replacements.
He said a big vacuum had been created because of the absence of the product in the right market. He also pointed to complacency in a big organisation like LIC that contributes to the decline adding that the entry of new players had also been a factor in the decline in market share.
He added that competition always impacts the market share and even with each player taking away two per cent of the share it amount to a 40 per cent impact on the market share. He said that the growth and strength of LIC lies in the trust it commands with both the urban and rural population.