Even though we are highlighting the positive things about the profile of LIC, we cannot be blind to probable weaknesses of and threats to LIC cannot be overlooked.
One on the performance trend and another on the organisational culture.As far as the performance trend is concerned, even though, LIC has been stabilising at the market share of 70% in terms of First Year Premium income, there are some areas of concern.Renewal Premium growth seems to be lagging behind with investment income exceeding RPI for the last three years.Even though the market share is 70% in gross FYP, the Group premium income is contributing to about 19% of the market share while in individual new business it is just 51 to 52%. This means that in a matter of two decades, about half the new business market in retail business has been garnered by 23 private life insurers .Alternative channels like Bancassurance channels have been developed better by private players.The top performing individual agents are ageing and new agents being appointed need to establish themselves in the competitive field.
To me it appears that in personnel matters -especially where benefits to pensioners are concerned-there is lack of dynamic pursuit for decision making by the top management.I feel that there is a conservative and play safe approach followed by LIC.Decision making will undergo a radical change when there is a shift towards a Board-run organisation.Cost-benefit considerations will be paramount.
No doubt the work force may feel insecure.But in a divested situation,LIC will focus on accountability and a performance based assessment.
This is all in keeping with the emerging modern corporate scenario.
No doubt the financial strength built by LIC will stand it in good stead.
C H Mahadevan.
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