FinMin asks LIC to attract younger customers
New Delhi: The Finance Ministry has asked LIC to devise a strategy with a view to focus on young people so that the average age of policy holders can be brought down leading to improvement in bottom line.
"The average age of policyholders (of LIC) is very high. It needs to come down," a top Finance Ministry official said.
LIC should bring proper policy and reach out to younger people so that this objective can be achieved, the official added.
Average age of insured with LIC is 37 years. Higher average age raises risk for LIC. Lower the age of people, the mortality rate such cases are lower. Thus, it will help the company in improving profitability.
The insurer behemoth has a market share of around 81 percent in terms of new business policies and 71.3 percent in terms of new business premium during 2011-12.
Finance Minister Pranab Mukherjee in a recent meeting with the heads of the public sector insurers had appreciated role of LIC in implementation of social security schemes.
"I congratulate LIC for being the trust factor among the people. LIC also is successfully implementing Social Security Schemes - Aam Aadmi Bimay Yojana and Janashree Bima Yojana (JBY)," he had said.
"I would advise LIC to work out "Kisaan Bima Yojana", a life insurance scheme for the farmers on the lines of JBY where the coverage can be extended up to the age of 65 or 70 years and the additional premium could be borne by the farmers covered under the scheme," he had said.
In order to increase penetration of insurance in the country, the Finance Ministry has advised insurers to appoint Business Correspondents as agents.
It will make business sense for insurance companies to appoint these Business Correspondents as agents to tap the huge potential of insurance coverage in rural areas.