Life Insurance Corp. of India (LIC) plans to create a separate digital vertical to regain attenuation market share by reducing its dependence on agents, while capitalizing on the digitalization trend encouraging investors’ pole to initial public offering.

M.R. Kumar, chairman, LIC says, “we want to have an entire vertical which will be digital. This will be apart from our plan to review and refurbish our existing online channel.”

According to the reports, between December 2020 and January 2022, LIC’s market share saw a downfall from 68.05 percent to 61.4 percent in premium income. The 55-year old state-run insurer lost about 13 percentage points in market share to private life insurers since June 2020, when it had 74.04 percent market share.

Reports suggest that fluctuation in market is primarily due to LIC’s dependence on agents, who found it difficult to approach prospective customers amid lockdowns following the outbreak of the pandemic in 2020.

LIC’s new business premium income in April-December fell by 3.07 percent from a year ago to Rs.1.26 trillion, while private insurers grew their new business income by 29.8 percent to Rs.79,216.84 crore, according to the reports.

LIC’s 1.36 million agents generate over 90 percent of premium income, while bank assurance and other channels contribute the rest.

“The (proposed) digital vertical will take into consideration everything that a customer wants or expects from online. If the customer wants to be assisted online, he can get it from the coming digital vertical. If the customer wants to buy a protection product completely online, he can avail it from the proposed digital vertical. We are hoping to launch it soon.We have also tied up with PolicyBazaar to help policyholders compare products. Even medical verification reports can be done through our online video consultation. So, that digital capability is also being reviewed,” Kumar adds.

Besides, all these reports suggest that a strong digital platform may help LIC curb its rising expenses, which have risen from Rs.28,331.6 crore in FY19 to Rs.34,425.88 crore in FY20 to Rs.35,162.21 crore in FY21. According to its IPO prospectus, the total expense for the six months ended 30 September was Rs.18,906.36 crore.