CHAPTER-4 LIFE INSURANCE CORPORATION: A PUBLIC SECTOR ORGANIZATION

Transcription

1 CHAPTER-4 LIFE INSURANCE CORPORATION: A PUBLIC SECTOR ORGANIZATION 4.1 Brief history of insurance 4.2 Life Insurance Corporation of India 4.3 Working methodology of life Insurance Corporation 4.4 Objectives of public relations in LIC 4.5 Consumer relations in LIC 4.6 Aim of corporate relations fulfilled at LIC 4.7 Growth of Life Insurance Corporation 4.8 Growth of Life Insurance Corporation in Conclusion

2 4.1 Brief History of Insurance The story of insurance is probably as old as the story of mankind. The same instinct that prompts modern businessmen today to secure themselves against loss and disaster existed in primitive men also. They too sought to avert the evil consequences of fire and flood and loss of life and were willing to make some sort of sacrifice in order to achieve security. Though the concept of insurance is largely a development of the recent past, particularly after the industrial era past few centuries yet its beginnings date back almost 6000 years. Life Insurance in its modern form came to India from England in the year Oriental Life Insurance Company started by Europeans in Calcutta was the first life insurance company on Indian Soil. All the insurance companies established during that period were brought up with the purpose of looking after the needs of European community and Indian natives were not being insured by these companies. However, later with the efforts of eminent people like Babu Muttylal Seal, the foreign life insurance companies started insuring Indian lives. But Indian lives were being treated as sub-standard lives and heavy extra premiums were being charged on them. Bombay Mutual Life Assurance Society heralded the birth of first Indian life insurance company in the year 1870, and covered Indian lives at normal rates. Starting as Indian enterprise with highly patriotic motives, insurance companies came into existence to carry the message of insurance and social security through insurance to various sectors of society. Bharat Insurance Company (1896) was also one of such companies inspired by nationalism. The Swadeshi movement of gave rise 100

3 to more insurance companies. The United India in Madras, National Indian and National Insurance in Calcutta and the Co-operative Assurance at Lahore were established in In 1907, Hindustan Co-operative Insurance Company took its birth in one of the rooms of the Jorasanko, house of the great poet Rabindranath Tagore, in Calcutta. The Indian Mercantile, General Assurance and Swadeshi Life (later Bombay Life) were some of the companies established during the same period. Prior to 1912, India had no legislation to regulate insurance business. In the year 1912, the Life Insurance Companies Act, and the Provident Fund Act were passed. The Life Insurance Companies Act, 1912 made it necessary that the premium rate tables and periodical valuations of companies should be certified by an actuary. But the Act discriminated between foreign and Indian companies on many accounts, putting the Indian companies at a disadvantage. The first two decades of the twentieth century saw lot of growth in insurance business. From 44 companies with total business-in-force as ` crore, it rose to 176 companies with total business-in-force as ` 298 crore in During the mushrooming of insurance companies many financially unsound concerns were also floated which failed miserably. The Insurance Act 1938 was the first legislation governing not only life insurance but also non-life insurance to provide strict state control over insurance business. The demand for nationalization of life insurance industry was made repeatedly in the past but it gathered momentum in 1944 when a bill to amend the Life Insurance Act 1938 was introduced in the Legislative Assembly. However, it was much later on the 19th of January, 1956, that life 101

4 insurance in India was nationalized. About 154 Indian insurance companies, 16 non- Indian companies and 75 provident were operating in India at the time of nationalization. Nationalization was accomplished in two stages; initially the management of the companies was taken over by means of an Ordinance, and later, the ownership too by means of a comprehensive bill. The Parliament of India passed the Life Insurance Corporation Act on the 19th of June 1956, and the Life Insurance Corporation of India was created on 1st September, 1956, with the objective of spreading life insurance much more widely and in particular to the rural areas with a view to reach all insurable persons in the country, providing them adequate financial cover at a reasonable cost. LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its corporate office in the year Since life insurance contracts are long term contracts and during the currency of the policy it requires a variety of services need was felt in the later years to expand the operations and place a branch office at each district headquarter. Re-organization of LIC took place and large numbers of new branch offices were opened. As a result of re-organisation, servicing functions were transferred to the branches, and branches were made accounting units. It worked wonders with the performance of the corporation. It may be seen that from about ` crores of New Business in 1957 the corporation crossed ` crores only in the year , and it took another 10 years for LIC to cross ` crore mark of new business. But with re- 102

5 organisation happening in the early eighties, by LIC had already crossed ` crore Sum Assured on new policies. Today LIC functions with 2048 fully computerized branch offices, 109 divisional offices, 8 zonal offices, 992 satellite offices and the Corporate office. LIC s Wide Area Network covers 109 divisional offices and connects all the branches through a Metro Area Network. LIC has tied up with some Banks and Service providers to offer on-line premium collection facility in selected cities. LIC s ECS and ATM premium payment facility is an addition to customer convenience. Apart from on-line Kiosks and IVRS, Info Centers have been commissioned at Mumbai, Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune and many other cities. With a vision of providing easy access to its policyholders, LIC has launched its SATELLITE SAMPARK offices. The satellite offices are smaller, leaner and closer to the customer. The digitalized records of the satellite offices will facilitate anywhere servicing and many other conveniences in the future. LIC continues to be the dominant life insurer even in the liberalized scenario of Indian insurance and is moving fast on a new growth trajectory surpassing its own past records. LIC has issued over one crore policies during the It had crossed the milestone of issuing 1, 01, 32,955 new policies by 15th Oct, 2005, posting a healthy growth rate of 16.67% over the corresponding period of the previous year and has crossed the issuing 3, 88, 39,000 new policies by current year and also From then to now, LIC has crossed many milestones and has set unprecedented performance records in various aspects of life insurance business. The same motives which 103

6 inspired our forefathers to bring insurance into existence in this country inspire us at LIC to take this message of protection to light the lamps of security in as many homes as possible and to help the people in providing security to their families. Some of the important milestones in the life insurance business in India are: Year Milestones in the life insurance business in India 1818 Oriental Life Insurance Company, the first life insurance company on Indian soil started functioning 1870 Bombay Mutual Life Assurance Society, the first Indian life insurance company started its business 1912 The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business 1928 The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses 1938 Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public Indian and foreign insurers and provident societies taken over by the central government and nationalised. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of ` 5 crore from the Government of India. 104

7 The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British. Some of the important milestones in the general insurance business in India are: Year Milestones in the general insurance business in India 1907 The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of general insurance business 1957 General Insurance Council, a wing of the Insurance Association of India, frames a code of conduct for ensuring fair conduct and sound business practices 1968 The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up The General Insurance Business (Nationalisation) Act, 1972 nationalised the general insurance business in India with effect from 1st January insurers amalgamated and grouped into four companies viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC incorporated as a company. INSURANCE MARKET -EARLIAR As Life Insurance was the first to be nationalized in Life Insurance Corporation of India was formed by consolidating the operations of various insurance companies. 105

8 General Insurance followed suit and was nationalized in General Insurance Corporation of India was set up as the controlling body with New India, United India, National and Oriental as its subsidiaries. The process of opening up the insurance sector was initiated against the background of Economic Reform process, which commenced from For this purpose, Malhotra Committee was formed during this year who submitted their report in 1994 and Insurance Regulatory Development Act (IRDA) was passed in Resultantly Indian Insurance was opened for private companies and Private Insurance Company effectively started operations from With such a large population and the untapped market area of this population, Insurance happens to be a very big opportunity in India. Today it stands as a business growing at the rate of per cent annually. Together with banking services, it adds about 7 per cent to the country s GDP.In spite of all this growth the statistics of the penetration of the insurance in the country is very poor. Nearly 80% of Indian populations are without Life insurance cover and the Health insurance. This is an indicator that growth potential for the insurance sector is immense in India. It was due to this immense growth that the regulations were introduced in the insurance sector and in continuation; Malhotra Committee was constituted by the government in 1993 to examine the various aspects of the industry. The key element of the reform process was Participation of overseas insurance companies with 26% capital. Creating a more efficient and competitive financial system suitable for the requirements of the economy was the main idea behind this reform. INSURANCE MARKET- PRESENT: 106

9 The insurance sector was opened up for private participation ten years ago. For years now, the private players are active in the liberalized environment. The insurance market have witnessed dynamic changes which includes presence of a large number of insurers both life and non-life segment. Most of the private insurance companies have formed joint venture collaborating well-recognized foreign players across the globe. There are now many insurance companies operating in the Indian market 23 life insurers, 23 non-life insurers and 1 reinsurer company. With many more joint ventures in the offing, the insurance industry in India today stands at a crossroads as competition intensifies and companies prepare survival strategies in a detariffed scenario. There is pressure from both within the country and outside on the Government to increase the foreign direct investment (FDI) limit from the current 26% to 49%, which would help JV partners to bring in funds for expansion. Also as the private sector controls over 26.18% of the life insurance market and over 26.53% of the nonlife market, the public sector companies still call the shots. The country s largest life insurer, Life Insurance Corporation of India (LIC), had a share of 74.82% in new business premium income. Similarly, the four public-sector non-life insurers New India Assurance, National Insurance, Oriental Insurance and United India Insurance had a combined market share of 73.47% as of October

10 Performance of Indian Life Insurance Sector: Before trying to get an idea about the performance of Indian Life Insurance Sector in , it will be better to take a look at some of its previous records that played a major role in the performance of this sector. With the passing of the Insurance Regulatory and Development Authority Act, the government of India made room for the private players in the sector, which in turn, resulted in impressive growth rates. Until that time, the Life Insurance Corporation of India was the only entity to represent the Indian life insurance industry. With passing time, the de-tariffing measures as well as the commission limits added to the scenario of competition and introduction of innumerable products. Between the periods and , the life insurance market of India grew at the rate of 26% in terms of compounded Annual Growth Rate (CAGR). Performance if Indian Life Insurance Sector in : While considering the performance of the insurance industry in the fiscal year , it will be seen that the life insurance sector of India registered a growth rate of 10.15% in the area of overall premium collection to ` crore. In , the industry had accounted for 29.0% growth posting ` crore. There was a marginal rise as per new policy sales are concerned. It witnessed a nominal growth of 0.1% to 5.09 crore in the year as against 10.23% in previous financial year. In the period ranging from April-December 2009, the total new premium income soared to ` crore posting a growth of 29.2%. In the same period of the 108

11 previous year, the premium collection stood at ` crore. On looking at the performance of the life insurance sector in April-December 2009, it was found that the new premium income was considerably more than the 15% growth suggested by the Life Insurance Council for the period Some of the life insurance companies in India that reported positive growth in the financial year are LIC, Met Life, Kotak Mahindra and Shriram. LIC booked a gain of ` crore as against ` crore the previous year. Met Life benefits rose to ` crore and Shriram profits were up by ` 8.11 crore. Kotak Mahindra, which had booked a loss of ` crore previous year, saw its profits rising by ` crore. However, the scenario was not same for all the companies. SBI Life, after reporting profits for 3 years in a row, faced a loss of ` crore in ICICI Prudential also incurred a record loss of ` crore. 4.2LIFE INSURANCE CORPORATION OF INDIA (LIC) Life Insurance Corporation of India (LIC) was formed in September, 1956 by an Act of Parliament, viz., Life Insurance Corporation Act, 1956, with capital contribution from the Government of India. The then Finance Minister, Shri C.D. Deshmukh, while piloting the bill, outlined the objectives of LIC thus: to conduct the business with the utmost economy, in a spirit of trusteeship; to charge premium no higher than warranted by strict actuarial considerations; to invest the funds for obtaining maximum yield for the policy holders consistent with safety of the capital; to render 109

12 prompt and efficient service to policy holders, thereby making insurance widely popular. Since nationalisation, Today LIC has built up a vast network of 2048 fully computerized branch offices, 109 divisional offices, 8 zonal offices, 992 satellite offices and the corporate office spread over the country. The Life Insurance Corporation of India also transacts business abroad and has offices in Fiji, Mauritius and United Kingdom. LIC is associated with joint ventures abroad in the field of insurance, namely, Ken-India Assurance Company Limited, Nairobi; United Oriental Assurance Company Limited, Kuala Lumpur and Life Insurance Corporation (International) E.C. Bahrain. The Corporation has registered a joint venture company in 26th December, 2000 in Kathmandu, Nepal by the name of Life Insurance Corporation (Nepal) Limited in collaboration with Vishal Group Limited, a local industrial Group. An offshore company L.I.C. (Mauritius) Off-shore Limited has also been set up in 2001 to tap the African insurance market. Objectives of LIC Spread Life Insurance widely and in particular to the rural areas and to the socially and economically backward classes with a view to reaching all insurable persons in the country and providing them adequate financial cover against death at a reasonable cost. Maximize mobilization of people's savings by making insurance-linked savings adequately attractive. 110

13 Bear in mind, in the investment of funds, the primary obligation to its policyholders, whose money it holds in trust, without losing sight of the interest of the community as a whole; the funds to be deployed to the best advantage of the investors as well as the community as a whole, keeping in view national priorities and obligations of attractive return. Act as trustees of the insured public in their individual and collective capacities. Meet the various life insurance needs of the community that would arise in the changing social and economic environment. Involve all people working in the Corporation to the best of their capability in furthering the interests of the insured public by providing l efficient service with courtesy. Promote amongst all agents and employees of the Corporation a sense of participation, pride and job satisfaction through discharge of their duties with dedication towards achievement of Corporate Objective. Mission Of LIC : Mission "Explore and enhance the quality of life of people through financial security by providing products and services of aspired attributes with competitive returns, and by rendering resources for economic development. 111

14 Vision "A trans-nationally competitive financial conglomerate of significance to societies and Pride of India. 112

15 4.3 WORKING METHODOLOGY OF LIC of India: 992 CENTRAL OFFICE The central office of the corporation is located at Bombay. The central Office is the one, which coordinates and integrates the activities of the different divisions of LIC. The central office makes the policies regarding the investment policy and its 113

16 implementation and about the formulation of under writing of large proposal. They also undertake the activity of submitting the returns to government, fixing the premium rate, setting standards for the performance, making other rules and regulations etc. these decision is made under the leadership of the chairman of the corporation. He also takes the help of the members of the executive committees and other bodies. There are many departments at the central level like Planning, engineering services, finance and accounts, legal and house property finance and estate and office services etc. are the different departments of the corporations. ZONAL OFFICES LIC consists of 8 zonal offices that are situated in Mumbai, New Delhi, Kanpur, Kolkata, Chennai, Hyderabad, Bhopal and Patna. The Zonal Offices are headed by Zonal managers. They are in direct control over the activities at Zonal level. Regional managers and secretaries, who hold charge of individual departments, assist the zonal manager. A Zonal Advisory Board with the chairman of the corporation as its chairman and zonal managers as the ex-official member is constituted for each of the zone. The zonal manager receives advice from this committee on such matters as referred to it under the regulations made by the corporation. The aggrieved persons make appeals over the decisions of the Divisional Managers to the Zonal Office. DIVISIONAL OFFICE The Divisional office supervises the functions of the branch. They provide guidance 114

17 and necessary resources to the branch offices. The heads of the different departments visit the branch offices periodically to provide necessary confidence and expertise to the personnel manning the branch offices. The divisional office deals with the activities that are referred to it by the branch offices. The Divisional Manager is the person in charge of activities at divisional level. Department managers and other supporting staff assist him. There is a divisional management committee with divisional manager as chairman to coordinate and review various departmental activities. BRANCH OFFICE The policies are sold and services rendered to the customers through the branch office. It is to be considered as project centre and a separate administrative unit. They are responsible for servicing policyholders in all respects. The Branch manager is overall in charge of LIC operations at branch level. To coordinate and review branch level activities a branch management committee is formed which consists so all sectional managers as members and Branch manager as chairman. 4.4 OBJECTIVES OF PUBLIC RELATIONS IN LIC The objectives of undertaking PR activities in LIC are manifold. In their Citizen s Charter the company states that: TO THE COMMUNITY: LIC conducts all aspects of business, keeping in view the interests of the community and the national priorities; Provide insurance cover and 115

18 financial security to every insurable segment including the socially and economically weaker sections of the society. TO THE CUSTOMERS: LIC provides prompt, efficient and courteous service to the customer, it acts as trustees of customer funds and invest it to their best advantage; build and maintain enduring relationship, keep them informed about the products and services etc. TO THE WORKFORCE: LIC promotes a sense of participation and make customers partners in progress; work towards ensuring their job satisfaction and sense of pride; provide an environment and the opportunities for growth to enable them to realize their full potential; take steps to develop professional skills to enable them to handle their assignments more efficiently. Advertising Budget of LIC: The management allocates some funds annually to the PR Department. This amount is then further allocated to the various Zonal Offices, which prepare their individual budgets according to their requirements. A PR plan is made at the beginning of each accounting year for which the Chairman appoints a PR Planning Committee. This committee comprises of the Director PR, Chief PRO, etc. Tasks and Activities under the purview of PR at LIC Various activities undertaken by Life Insurance Corporation some are listed below: 116

19 Advertising Though countywide advertising is done by the marketing department, advertising locally in the various cities is handled by Zonal Offices. The advertising strategy is very well planned and is largely aimed at image building. Organize press conferences Press conferences are organized occasionally, generally when a new policy is released or when the annual financial results are announced or if something of significance has happened. Issue Press Releases Press Releases are issued both by the central office as well as the various zonal offices. Participate in public awareness programmes LIC has repeatedly joined itself with various community development and awareness programmes for the cause of rural development and infrastructure development. 4.5 CONSUMER RELATIONS IN LIC In consonance with the changes taking place in the insurance market, the corporation has undergone a transformation, simultaneously requiring a revamp in its image. Systematic and focused PR initiatives and widespread publicity have resulted in 117

20 markedly improved visibility. The corporation has emerged with a much younger and sleeker image. Conscious efforts are making to bring about a transformation in the corporate image. Through various campaigns, the corporation is trying to depict the organization as one oriented towards the younger generation. The corporation advertising campaigns assisted the marketing strategies. PR Activities for Consumer Relations The business of insurance is purely service which cannot be seen or held. Hence, the consumer relations activities of LIC concentrate on the customer public and building relations with prospective customer. The corporation has repeatedly made endeavors to reach out to the consumers, interact with them and keep them satisfied. The corporation tries to achieve its objective through a number of means. Oral Communication Oral communication with the consumer public is the most effective means of presenting facts and creating understanding of the organization s policies and practices. Employee-Consumer Communication: The harmonious relationship that LIC has, through the years, built and maintained with its customers has only been possible due to its dedicated and committed team of Development Officers and scores of Insurance Agents throughout the country. 118

21 Press Conferences Press Conferences are organized to announce new appointments of top executives, introduction of new schemes, etc. It is very important in today s world because Now a days people are being aware about the appointment procedure of different companies and consumer are also getting educated day by day because of which it becomes necessary for the companies to keep press conferences. Audio-Visual Communication Television and Radio broadcasts are a basic medium of consumer communication. Now a-days it gaining a lot of importance. Television and Radio advertising The corporation s advertisements reached nearly 25 crore people through over 50 campaigns. There were 79 hours of TV advertising and 408 hours of Radio advertising. Trans-slides The Corporation has placed trans-slides at strategic places, like Railway Stations and Airports, for maximum exposure to public at large. Printed Communication 119

22 At LIC, printed communications are used in conjunction with oral communication media. Press Release Press releases are frequently handed out to the media by the local PR department on behalf of the company. These generally comprise of any subject or issue concerning the company, containing information for policyholders or any item of news value to the media and its readers. Journals and Publications The corporation takes out its annual working results and several other publications from time to time to keep the public abreast of the happenings and achievements at LIC. Financial Results The annual financial report of the corporation is published in the National dailies and is circulated amongst the shareholders to keep them informed. It also aims at attracting new investors. Booklets, Brochures and Pamphlets Booklets, Brochures and Pamphlets are generally taken out to inform its internal and external public about its various new schemes and act as an effective medium of print communication. 120

23 Posters and Hoardings These tools are not only an advertising medium but also a very effective PR tool. LIC uses posters and hoardings to get quick public notice. Posters and hoardings are widely placed throughout the city at busy intersections like subways, railway stations, roadsides, bus shelters, etc. Other Amenities Provided by LIC Website :The Corporation s website gives information about the corporation s products, services, subsidiaries and addresses of branches and about premium payment through the internet. It also provides Press releases News sections Online policy status Online Premium Payment LIC has tied up with HDFC Bank, ICICI Bank, UTI Bank, Bank of Punjab, Global Trust Bank, Corporation Bank, The Federal Bank Ltd., Citibank, and service providers like Bill Junction.com, timesofmoney.com to offer the online premium payment facility to its customers in select cities. Online Payment of premium: a 24x7 convenience 121

24 The policyholder can log on to LIC corporate web site: ' and can make online payment of premium through net banking account. In addition to payment of premium, policyholders can view status report, premium calendar, download online receipt, download premium payment statement, update address and post a complaint. Electronic Clearing Service (ECS) No need to worry about the due dates With ECS policyholder can have his premium deductions made from his bank account periodically by submitting a mandate form to LIC Branch Office. Information Kiosks The corporation has installed online information kiosks at prominent places across the country. This provides information about the Products, services and policy status reports to the customers. Customer Contact Programme The purpose of such a campaign is to strengthen the relationship with the customers and to build bridges of understanding. 4.6 AIM OF CORPORATE RELATIONS FULFILLED AT LIC The aim of any organization is to create for itself: A. CORPORATE IDENTITY 122

25 B. CORPORATE IMAGE C. CORPORATE CITIZEN A. CORPORATE IDENTITY Image Communicators/ Identity Creators Company Logo The company s logo has become synonymous with insurance and security in India. It helps to identify the company easily. Sign-up Line We Know India Better is the sign up line of LIC Company Publications The company has a host of publications that comprise of in-house journals, external newsletters, annual reports, etc. Citizens Charter The company philosophy goes a long way in creation of harmonious relations with its publics. The citizen s charter is a comprehensive statement of the company s philosophy towards its publics. B. CORPORATE IMAGE 123

26 The above listed image communicators have been very successful in creating a corporate image of LIC in the minds of the people over the years since its establishment. C. CORPORATE CITIZEN With all its PR initiatives and activities, since its establishment, LIC has proved to be a successful corporate citizen. Corporate Policy of LIC on Public Relations Public Relations aims at building-up and maintaining sound, effective and productive relations with the public so as to help the organization to understand and interpret the environment as also help the public and the society at large to appreciate the performance and limitations of the organization. Public Relations have the responsibility to build and maintain two-way relations between the Public and the Organization at all levels. The Public in the case of LIC includes: A. Levels of employees and agents. B. Customers. C. Government: Central, State & Local bodies. D. Media, Press, T.V., Radio & Agency-owners and correspondents and 124

27 E. Citizens at large. A clearly laid down Public Relations Policy, therefore, is essential to set the goals, indicate the strategies and give proper direction to all levels in the area of Public Relations. Mission Establish understanding and develop awareness of mutual aspirations of LIC and the Public. Goals 1. Promote within the Corporation greater awareness of the changing environment and he need to align the corporate policy to the emerging situation. 2. Help fashioning, within the constraints, its policies, programmes, practices and Products to meet the expectations of the Public. Help the public to appreciate the Performance and the limitations of LIC. 3. Make PR occupy the front seat in the organizational set-up. Strategy 1. Develop excellent relations with the totality of the media-print, electronic and agency owners and reporters by regular exchange of information with them. 2. Establish relations-and develop understanding with the Govt. -Central, State & Local bodies through legislators and Govt. officials. 125

28 3. Develop full understanding with the workers-employees at all levels and agents on Organizational goals, policies, practices and programmes. 4. Develop an effective system of communication with the departments and operating units on the environment and on implementation of policies. 5. Build an atmosphere of goodwill and understanding inside and outside the organization leading.to better appreciation of the corporation's policies and performance. 6. Help to evolve effective machinery for quick and satisfactory redressal of grievances of the public. 7. Help to develop an image of LIC as a responsive organization, 8. Devise methods for opening up channels of two-way communication with various publics of the Corporation. Action Plan 1. Keeping the objectives, philosophy and the strategies in view, drawing-up annual PR plans by Branches, Divisions, Zones & Corporate Office. 2. Develop an effective system of periodical reviews of PR Plans at all levels - B.O., D.O., Z.O. and Corporate. 126

29 3. Develop streamlined methods of systematic dissemination of the information relevant to each of the publics. 4. Develop streamlined methods of receiving messages/feedbacks from the totality of the publics. 5. Formation of PR Advisory Committees at D.O., Z.O. and C.O.organize PR departments in the C.O., Z.O.s and D.O.s for realization of the goals, and develop a nucleus in branches. 6. Organize events like inauguration of new B.O., D.O., Z.O. or any arm of the Corporation (diversification) etc. as public functions to project corporate image. 7. Actively participate in at least one important scheme in each of the States and in two or three national level schemes to help improve the quality of social life and establish the social relevance of LIC. 8. Develop a task-plan in respect of the above strategies. RALLY ORGANISATION LIC has organized a massive rally to pay homage martyrs of Kargil to provide moral support to the Indian army. Press Releases Press releases regarding important news are released from time to time so that people are kept informed and they know about them. Customer Meets 127

30 Periodical customer meets are organized at Divisional and Branch level to facilitate greater interaction with policyholders. Publicity Pavilion Publicity Pavilion are arranged to display information about PR and Publicity activities of LIC. Consumers Affair Committee A high profile committee has been constituted by the Central office with eminent persons from the consumer s movement being its member to advice and guide LIC on matters concerning consumer interests. Exhibitions LIC arranges its various schemes and exhibitions so that it can display its various schemes and plans. Citizens Charter The corporation has adopted a Citizens Charter wherein commitments have been made to its customers for higher standards in servicing. Free Phone Call Facility to the Policy Holders A unique facility of free phone call service is being provided to the policyholders of Mumbai city to enable them to have easy access to grievance redressal officers over the phone. 128

31 Sponsorship LIC sponsors many events like chess tournaments table tennis tournaments for the employees and for the public. It has also sponsored a health camp organized by Masoom an organization of understanding and fraternity. Distribution of Dairies and Calendars LIC distributes dairies and calendars to its employees and to the public every year. Publicity Stalls Publicity stalls are been put up by LIC at different fairs and melas to publicize the corporation and its schemes and plans. 129

32 Public Functions Inauguration of new offices helps in communication as well as in enhancing the image of the corporation. Advertisement in Newspaper and Magazine Advertisement about LIC s products, activities and policies is published in newspapers and magazines. House Magazine Yogkshema Yogkshema is the house magazine of LIC. It provides information about the corporation, its activities, policies and programs. Advertisement at Railway Station and Airport Posters and banners are set up at strategically important public places such as Airports, Railway stations, Bus terminals, shopping counters an at the reception counters of the business premises. This enables the policyholders to access information about LIC & its products etc. Insurance Week An insurance week is arranged by LIC through which people were exposed to various insurance schemes of LIC. 130

33 Advertisement on Radio satellite channel Advertisement about LIC are frequently been telecast on radio and satellite channel. Advertisement at Kumbh Mela LIC has also advertised about its products and the corporation even in Kumbh Mela. Training Programmes Training programmes are arranged by LIC for its employees so that they can be trained for the purpose of public relation activities. Meetings : Meetings of Development officers are arranged by LIC to train their employees for public relation activities. All above advertising and promotional strategy has been help full to achieve to hold maximum market share of Insurance business. 131

34 The following table shows the market share of life and non-life insurers MARKET SHARE (%) LIFE INSURERS NON LIFE INSURERS 1. LIC New India ICICI Prudential National Bajaj Allianz United India HDFC Standard Oriental Brila Sunlife ICICI- Lombard Tata AIG Bajaj Allianz SBI Life IFFCO-Tokio Max New York Tata-AIG Aviva ECGC Kotak Mahindra Old Mutual Royal Sundaram ING Vysya Cholamandala m AMP Sanmar HDFC-Chubb

35 13. Met Life Reliance General Sahara Life Agriculture Insurance -- Co. Private total Private total Public total Public total Grand total Grand total In the above table shows, the private players in the life insurance business have increased their market share to per cent. Among them ICICI prudential is ranked first in capturing the market followed by Bajaj Allianz and HDFC Standard. In the General Insurance sector, the private players have captured per cent. Among them ICICI-Lombard is ranked first, followed by Bajaj Allianz and IFFCO- TOKIO. The healthy competition in the sector enabled the State owned insurers of our mother country to reduce its market share to per cent and percent in life and nonlife business respectively. Moreover, private insurers have planned to increase their market share in the next five years. The public insurers have to enrich its approach to withhold its share. 133

36 4.7 Growth of Life Insurance Corporation Life Insurance Corporation Despite global recession, insurance major Life Insurance Corporation of India's (LIC) total fund rose to over ` 8, 07, crore in 2009 from ` crore in 1956, when it was nationalised. "In the financial year , the LIC has insured 3.58 crore persons to earn 3.58 lakh crore new premium incomes, It was revealed that despite private players' presence in the market, LIC has maintained a market share of per cent in premium income and per cent in number of policies. LIC is termed as the world's largest insurance company with crore customer. Since then LIC has spearheaded the financial and infrastructure development of the nation. The performance of LIC has been exemplary and it has been growing from strength to strength be it customer base, agency network, branch office network, and the like. LIC has played a significant role in spreading life insurance among the masses and mobilization of people's money for people's welfare. On September 1, 1956, LIC had assets amounting to ` crores and now it has risen to ` 8, 73, crores. If the total business at the end of the first year on December 1957 was 7, 94,585 policies and sum assured was ` crores, in over 50 years LIC has grown by leaps and bounds to a whopping 3.58 crores policies and a huge sum assured of ` 3, 90,053 crores during the fiscal of

37 135

38 In the light of turmoil in the global economy, LIC revised their marketing and advertising strategy and outlook towards the market. In spite of challenging economic environment, LIC's total premium income for the fiscal was ` 1, 57,186 crores. 136

39 Pension & Group Schemes procured ` 12, 507 crores of New Business Premium Income under 15,851 schemes and 2.07 crores of lives. As LIC's investment in government and social sector stood at ` 5, 29,525 crores while in the infrastructure sector it was to the tune of Rest `1,00,789 crores. 4.8 GROWTH OF LIFE INSURANCE CORPORATION IN LIC performances are as follows: NEW BUSINESS DURING THE YEAR (Individual Number of Policies (in First Premium Income(` in Assurances) lakh) crore) COMPOSITE MARKET SHARE % % 137

40 BUSINESS IN FORCE AS AT Policies (in crore) Sum Assured (` in crore) Individual Assurances ,31,086 Group Insurance(lives) ,57,

41 Marketing - Bancassurance & Alternate Channels (Achievement from to ) Volume Percentage share to Total New Business Policies % First Premium Income (` in Crores) % 139

42 Chief Life Insurance Advisor (CLIA) Channel (Achievement from to ) Achievement Percentage share to Total New Business Policies 20,90, % First Premium Income (` in % Crores) 140

43 MICRO INSURANCE New Business: Year Growth % Policies 15,41,218 19,85, Sum Assured (` in Crores) FPI (` in Lakhs)

44 OTHER PARAMETERS 1/04/09 TO 31/03/2010 (` In crores) 1. Total Income ` 2,98, Total Premium Income ` 1,85, Total Policy Payments ` 80, Total Life Fund ( as at ) ` 9,99, Total Assets ( as at ) ` 11,52,

45 INVESTMENT IN GOVT. & SOCIAL SECTOR (` IN CRORES) Type of Investment AS ON Central Government Securities State Government & Other Govt. Guaranteed Marketable Securities Sub-Total (A) Housing & Infrastructure Investment (a) Housing (b) Power (c) Irrigation/ Water Supply & Sewerage (d) Road, Port, Bridges & Railways (e) Others (incl of Telecom) Sub- Total (B) Total A+B

46 LIC s Contribution towards Various Five Year Plans Plan Year Contributions (` cr) II III IV V VI VII VIII IX X

47 XI (Contd.) AWARDS WON BY LIC Some of the recent awards received by LIC: Sr.No. Name of the Organisation Name of the Award 1 Superbrands Super Brand India Readers Digest Readers Digest Trusted Brand Award Platinum Category 3 NDTV Profit Business Leadership Award, Outlook Money - NDTV Profit Best Life Insurer Award, World Brand Congress Global Award for Brand Excellence -Brand Leadership Award(Overall) World Brand Congress Global Award for Brand Excellence - (Banking and Financial Services 145

48 Category) 7 Asia Pacific HRM Congress Innovative HR practices Award, ET Brand Equity Top Brand in the Insurance Category in the survey conducted by Brand Equity with AC Nielson. 9 CNBC Awaz Most Preferred Life Insurance Company of the Year 10 Employer Branding Awards Best Employer Brand Award, SKOCH Challenger Award Micro Insurance 12 49th ABCI Annual Award Wall Calendar for the year, CFBP Jamnalal Bajaj Uchit Service Category- Large Enterprises Vyavahar Puraskar

49 4.9 CONCLUSION Public Relation came into existence by the belief that if we do something good for people then only the people will say well about the organization. Today's is an age of competition and to remain firm in the competition depends on how efficiently the Organization manages its PR & projects the company's image. Public Relation will not sell goods and Services but it is bound to create an atmosphere which will make the free enterprise, a responsible enterprise. Public Relations, in fact will prove to be the most effective tool for communicating with the People who are still remote from industry for convincing them that corporate objectives are ultimately in the interest of the public. 147