Why LIC introduced products sale online?


Preamble:- In spite of strongly protest of their individual agents regarding online sale of life insurance products through website, LIC has launched the same in current financial year. Many people are still not able to understand why LIC start this, while it is fact that they have good number of working Agents. If we go behind 5 to 6 years back LIC always spoke that they believe only one mode sale which is very effective and trustable i.e. insurance advisors. Can we understand it, that now LIC agent is not effective, so LIC diverted their marketing route through online. There may be many reasons, let’s try to find out the exact cause behind this.

LIC Agents: - The footing of LIC stands on Agents and we always listen this in media and by their top executives. The glorious 58 years of LIC journey and their each moment made special by their Agents. Let’s see why we always listen LIC footing stands on Agents, please see following picture.
 
 
If we see above picture, we found that 21.23 lacs Agents working in Life Insurance Sector and out of that 55% i.e. 11.73 Lacs working with LIC of India alone and rest 35% i.e. 9.50 lacs Agents working with other 23 Life Insurance Companies. The 41 thousands Agents average per Life Insurance Company working, while LIC have 11.73 lacs Agents alone. It’s make LIC biggest player in the life insurance sector. This is the basic reason why LIC market share is best and their reaches are all corner of the country. This is also reason why private player struggling for handsome market share. Whenever they will reach the level of Agents as equal to LIC, then they can show extraordinary performance.

Why LIC entered into online sale: - LIC of India entered into online sale from current financial year, in spite of protest from their internal Agents. Before writing any reason you need to see following picture that is showing status of life insurance industry. This is based on latest available data and this data taken from Insurance Regulatory and Development Authority.
  


This data clearly indicates that individual Agents losing their charms. The whole life insurance industry is witness that in their overall sales approximately 40% business comes from direct selling. This is the sufficient reason why LIC entered into this segment. At this time LIC of India have two products which are selling through online i.e.  LIC’s e-term and LIC’s Jeevan Akshay VI.

LIC Decision right or wrong: - Every life insurance player coming into the sector to spread life insurance business and get maximum advantages/benefits, LIC one of them. After Agents, direct sale channel is second largest channel which is producing good business. Direct selling also in the benefits of the customer, if you take policy from Agents the some portion of your premium goes to Agents in the form of commission while by direct sale your commission portion saved and you will be benefited. Your premium may be less as compared to policy buying through Agents. This is the main reason why Agents protesting this activity of LIC.

Looking to the interest of LIC their Customers and awareness under the general public of India about life insurance the decision of LIC to enter into online sale is really appreciable. If LIC not entered in this segment, private player will take its advantages and they will give tough competition to LIC. For LIC it was necessary to came in this segment and save their place amongst life insurance players.

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