First they sold the policies. Now they will collect the premium payments.
Creaking under the increasing load of crores of new policies that its own administrative staff cannot easily manage in payments at its branches, state-owned Life Insurance Corp of India (LIC) is falling back on its vast army of agents to collect the payments. They will get additional commissions — Rs 5 per transaction — for this.
Despite a number of premium payment avenues such as its branch offices, banks, Internet portal, mobile phone-based payments and drop-box facilities for cheques, LIC’s infrastructure is overloaded. Now, senior agents are being enlisted to collect premiums and issue receipts.
LIC has so far authorised 4,350 agents and plans to take the number to 10,000 by the end of the current fiscal year.
“There are around 3.5 crore to 4 crore new policies that are added every year. In addition there are 23 crore existing policies. Of these, some mature, some bring claims and some get surrendered or lapse. Assuming that the net addition is 2 crore policies per year and there are 2 premium payments per policy, this translates into 4 crore premium payment transactions. So any payment gateway initiative falls short,” Nilesh Sathe, Executive Director, LIC, told Hindustan Times.
LIC currently has 2,048 branches and 800 satellite offices. It currently collects 95 per cent of the premium through various branch offices while 5 per cent comes through the various payment gateways.
“Only agents who are chief life insurance advisors or chairman club members with 10 years standing can be empowered to collect the premium,” Sathe said.