Reliance Life eyes LIC model to expand reach
They may be rivals in overall business of selling insurance products, but Reliance Life wants to emulate model followed by LIC and become a private sector alternative to the state-run behemoth.
New Delhi: They may be rivals in overall business of selling insurance products, but Reliance Life wants to emulate model followed by LIC and become a private sector alternative to the state-run behemoth.
Life Insurance Corporation of India (LIC) is by far the biggest insurer of the country, while Reliance Life is one of the leading private sector entities and is part of Anil Ambani-led Reliance Group's financial services arm Reliance Capital.
Amused by LIC's highly successful distribution model operating through a huge agent base, Reliance Life Insurance Company (RLIC) says it is aiming to become a private sector equivalent to LIC in terms of penetration and productivity in India where more than two-third of the populace is yet to benefit from life insurance.
"LIC enjoys incredible trust with its customers and is also deeply penetrated across the length and breadth of the country. In order to run a successful agency-driven business, we have a huge case study in LIC itself," RLIC CEO Anup Rau told the agency.
"We would like to emulate the LIC model for creating a highly productive agent base, infusing trust among people through sustenance of sales force and increasing our penetration," he added.
With over two thousand branch offices and more than 10 lakh agents, LIC has insured over 250 million lives in its 52 years of operations.
On its part, RLIC says it plans to further strengthen its productive agent base, with a view to increasing insurance penetration in the country.
At present, the company has over 80,000 insurance advisors and 8,000 outlets across the country. In terms of new business premium, it commands a market share of 7 per cent of the private sector life insurance industry.
"We aim to reach out to the Bharat where 70 percent of the populace is yet to benefit from insurance and other financial instruments.
"We are targeting small towns and villages with our diverse products and services and aiming to reach out to every nook and corner of the country by expanding our agency channel. Our aim is to become a Bharat insurance company by servicing these untapped opportunities," he added.
Apart from expanding its agent base, Reliance Life Insurance has also created three proprietary channels, Life Plaza, Face-to-Face, and Career Agency, based on models of its Japanese partner Nippon Life, to focus on small towns and non-urban centres.
The company has hired over 2,000 people under its proprietary channels and is planning to increase the headcount by over 20 percent in the next financial year.
"We will increase our workforce strength under the proprietary channels in 2014-15 and footprint in Tier II, III and IV towns through these distribution models to further boost insurance penetration in India. We expect 10 per cent business contribution from the three channels in FY 15," Rau said.
Helped by increased sales of traditional policies and better agent productivity, RLIC has posted a four-fold rise in its net profit to Rs 136 crore in the second quarter of the current financial year from a net profit of Rs 31 crore in the July-September quarter of 2012-13.