What are LIC’s most important achievements since coming into being on September 1, 1956?

Standing tall as the No. 1 life insurer in the country after 70 years is, in itself, a great achievement. But the most important achievement has been the enduring trust that LIC has built among Indians.

Second, LIC has used that trust to contribute to nation-building and provide financial protection to millions of Indian households. It has transformed life insurance from what was largely considered “an instrument for the elite” into a household financial protection instrument.

Third is the unrivalled distribution network that LIC has built. Even after the opening up of the insurance sector, we have continued to build considerable distribution strength and bandwidth.

Another important achievement has been the development of a robust technology infrastructure, which provides the backbone for handling such large volumes of business.

How are you preparing for the challenges ahead?

We are a legacy organisation built on the trust of Indians. The challenge is to convert that legacy trust into an organisation that is nimble-footed, has a digital-first approach and provides solutions relevant to all generations and changing times.

There are many challenges involved, but we will continuously move towards remaining relevant and maintaining our strength.

How would you appeal to Gen Z and Gen Alpha, for whom the traditional concept of institutional trust may not have the same significance it did for previous generations?

That is precisely why I spoke about transforming into a technology-driven organisation. The needs of the current generation are different from those of previous generations. There has been an increase in disposable income but, at the same time, there are significant uncertainties, including in the employment market.

The benefits of the traditional joint family system and the security it provided are also diminishing. Individuals are increasingly dependent on themselves for financial security. Life expectancy has also increased. People, therefore, need to plan for a longer period of survival than previous generations may have anticipated. We are transforming LIC into an organisation capable of meeting these emerging needs.

How are you addressing these needs?

We are designing products accordingly. First, we are looking at greater flexibility in terms of premium contributions and payments. Second, the products need to meet long-term requirements by providing protection, lifelong income and benefits. Third, customers also expect an appropriate return from such instruments.

We also need to enable customers to deal with products in a do-it-yourself mode, which appeals to the current generation.

We are looking at meeting every customer requirement throughout the policy lifecycle through digital modes.

Where do you see the organisation by 2030?

We are conscious that as the market expands, with more players entering, market share will not remain static.

Our objective is to have a sustainable growth model while remaining the unquestioned market leader and the preferred long-term solution provider for the nation, including when we reach our 100th year. We need to continue growing at a rate that is at least slightly higher than the overall industry growth.

Life insurance penetration remains low in India. How can it be increased?

Penetration is measured as total insurance premium as a proportion of GDP. The fact that penetration has not increased sufficiently indicates that insurance premium growth has not kept pace with GDP growth.

The objective should be to bring more people under life insurance coverage. But having an insurance policy does not necessarily mean that a person has adequate insurance. The value of the policy relative to the customer’s income and liabilities also needs to be examined. This is essentially the protection gap.

We need to focus on both aspects: bringing people who are outside the insurance system into the fold, and increasing the level of cover for those who already have insurance. This requires greater accessibility, affordability and products that meet customer needs.

What is the main hurdle in increasing insurance penetration?

One important factor is the trust deficit among customers, particularly in certain forms of insurance such as health and protection. When claim settlement experiences are not satisfactory, it creates a trust deficit. This needs to be addressed. More importantly, there needs to be greater adoption of insurance. We believe insurance should be treated as an integral part of financial management and wealth creation, and should ideally be incorporated into educational curriculum.

A strong insurance awareness campaign is required to significantly increase adoption of life insurance.

What steps are you taking to achieve the ‘Insurance for all by 2047’ goal?

One of the primary objectives for which LIC was established was to take the message of life insurance to every corner of the country. Geographical reach has, therefore, been an important focus. LIC currently has a physical presence in the form of an office in around 92 per cent of districts.

In other areas, we have representation through LIC agents, their offices, and empowered agents authorised to collect premiums and provide limited services.

The next step is to ensure representation at the panchayat level. We have initiated efforts to have LIC representation in every village panchayat in the country.

We also need to reach more people through our extensive physical network, as well as digital channels, thereby improving accessibility to insurance.

There are over 2.5 lakh panchayats. How will LIC reach all of them?

It will be a multiple-model approach. LIC has about 14.45 lakh agents, and we are looking at having an agent in every panchayat. We are identifying panchayats that don’t have an LIC agent and visiting them to pick suitable people as insurance distributors. We have also launched (in December 2024) the women-centric Bima Sakhi — Women Career Agents (Stipendiary) Scheme — which has been a major success. We currently have around 2.8 lakh Bima Sakhis.

What proportion of India’s panchayats currently have an LIC presence?

We have currently reached around 59 per cent of the panchayats, and are continuing to expand. We are trying to reach 100 per cent as quickly as possible. It is a massive exercise because, in some places, finding the right person is not easy. We expect to achieve this within the next couple of years.

LIC is now a listed company. How do you balance its traditional role in nation-building and serving policyholders with the expectations of shareholders for profitability?

There is indeed a thin line that separates these objectives. LIC has always been known for taking care of the interests of policyholders and working in the national interest.

Even when LIC was listed (in May 2022), the shareholders who came in were aware that this is an organisation built around the responsibility of providing insurance to the Indian public and mobilising people’s savings for nation-building activities. They understand the objectives of the corporation and the principles on which it functions.

Having said that, after the listing, we have had to take into account a new set of stakeholders in the form of shareholders other than the government. We have, therefore, tried to balance both interests. We continue to focus on providing insurance cover and mobilising public savings while simultaneously improving the efficiency and performance of the corporation. The objective is to do justice to both policyholders and shareholders.

What is the status of LIC’s proposed entry into health insurance?

There were discussions in the market that LIC could enter health insurance as a player, particularly when the government was considering amendments to the insurance legislation, including the possibility of composite licences.

We were looking at entering the health insurance sector as a strategic investor by taking a stake in an existing standalone health insurance company. But we have not reached a stage where we could finalise or identify a particular company for investment.

In the meantime, the new legislation, the Sabka Bima Sabki Raksha Act, has been introduced and passed, but the provision for a composite licence has not been included. Therefore, currently there is no urgency to gain exposure to health insurance or general insurance.

We are keeping our options open. If a good opportunity presents itself, we will evaluate it to see if we can translate it into an investment. These