The Digital Era & challenges it posed
Digital revolution has taken consumers with a whirlwind and has been instrumental in modifying consumer behavior over the past 2-3 decades. There is immense development brought by advent of technology, internet and web service have expanded the world of consumer by leaps and bounds.
With the onset of computer age, LIC had overwhelming task at hand: facing the paradigm altering change and adapting to changing consumer patterns. What made LIC’s task even more taxing was their huge costumer based which needed to be digitized.
? Initial progress on digitization was very slow; backend and frontend support systems to be established, networking to be perfected ( local as well as wide are), software to be mastered and so forth.
? During the same time, computers were also passing through an age of evolution with hardware as well as software advancing by the day. All this took a long time to assimilate and perfect.
? Another challenge faced as the time was initial apprehension of employees towards computerization which was misconceived in loss of jobs.
? With the advent of technology computers have today become an integral part life at LIC
Online transactions have made their way into the habits of Indian consumers and LIC greatly benefitted from the digital reforms introduced. Responses tine as well as reach has increased may fold, while processes and settlement have an improved turn-around time.
The LIC Edge
LIC always enjoys over its counterparts in the industry. While private players continue to grow, a special consideration always given to LIC by the consumers. With an extensive network designed to reach majority of consumers, LIC enjoys the statuys of being among the topmost insurers through out the globe. Some of the factors contributing to continued trust reposed in LIC by consumers are
? One of the lowest outstanding claim ratio in the world
? Prompt settlement of claims
? An extensive network of consumers services and ease of access for premium payments
? Being the forerunner of many innovative initiatives life Pension funds, Micro insurance, etc
? Contribution to the financial health of the country
? LIC offices/service branches in the remotest parts of the country
? Digitized policy records of monumental consumer data base and so forth.
Extensive network of LIC allows consumer the assurance of a branch or a satellite office in the vicinity, no matter how remote their location is. In addition, digitization of records allows prompt and easy access to consumer data and consequently better and faster service. All these factors lend tremendous strength to LIC and contribute to its continued dominance of Indian Insurance market.
Warding off Competition
How LIC does it
Introduction of liberalization in India afforded private insurers and opportunity toi enter the market. These new entrants caused some erosion of LIC’s market share in the initial years forcing LIC to adapt at a rapid pace. Throughout its years of existence , LIC had always evolved gradually which posed a challenging situation with the advent of liberalization is the situation demanded a quick and decisive response.
However, with years of expertise and collective market intelligence, LIC adapted to changing market directives admirably and came back with new initiatioves and counter strategies to regain the lost market share.
Important initiatives which helped LIC to regain market share substantially
? Policy changes with the corporation
? Revamp of product bouquet
? Increased efficiency and service operation
? Swift Digitalization and co centralization of consumer data of consumer data etc.,
? Exponential growth in smaller pockets of the country.
? Another factor contributing to retention of prime spot for LIC in the case of access provided for their consumers.
? LIC has also initiated several customer centric initiatives like Enterprise document Management System, Dedicated portal for customers, etc.,
? New channels like CLIA(Chief Life Insurance Advisor), Bancassirance and alterntive channels, Direct marketing enhanced the reach and competence which led to further strengthening of the organization.
? \Health insurance is another field giging substantial support to LIC’s business.
LIC continuously strives to scan market scenario, attends to changes, foresees, business avenues and realigns itself to sustain. Pioneering products combined with an astute understanding of the market allows LIC to reorganize itself to outperform competition.
Procedures on Salary saving scheme
Under Salary saving scheme, the employee at the time of applying for insurance, normally pays two monthly insurance installments of premium and signs on authority Letter. The subsequent premiums are to be deducted from the salary and paid by the employer to the Life insurance Corporation based on the Letter of Authority given by the employee. In the matter of Recovery and Remittance of premium of premium under Salary Savings Scheme, the procedure to be adopted is explained below:
A. Recoveries form Salaries :
1. As stated above, two installment of premium are collected for all new proposals direct from the proponents and recovery from their salaries commences only from the third month of entry.
2. For such new entrants in a month a list giving the names of the employees with the letters of authorization are sent by about the 25th of the succeeding month( i.e.) at the end of the month prior to the one in which the recoveries are to commence. This enables the employees to register the request for recovery and to make all preliminary arrangements at your and to arrange for the deduction of premia from the salaries or the concerned employees in the subsequent month.. Recoveries are be effected only from the salaries commencing from the month indicated in the list.
3. These lists and letters of authorization by the employees are the basis for recovery of the premia from their salaries.
4. It is suggested that a Register of such authorization letter be maintained at the employer end for any reference with regard to the recoveries .For all Government Offices the G.O itself provides for maintenance of such Register ( Form NO. B/C).
5. Once the amount of recovery is taken note of it will be permanent item in the deduction column of the pay Bill unless authority for deduction is WITH DRAWN. It is better to discourage withdrawals within 3 years as it would amount to heavy loss to the policyholders as the polices acquire Surrender/ Paid-up Values only after 3 years.
B. PAYMENT OF COLLECTIONS
6. To enable the employer to remit the amount from the salaries of the employees on the basis of the letters of authorization, LIC regularly send monthly demand invoice in duplicate, with a form of reconciliation. This is being sent before the last day of every month, it is better not to wait for such demand lists to effect the recoveries but to proceed with the deduction on the basis of authorization letters.
7. LIC’s demand list will be only in the serial order of the policy numbers. In the case of an institution where there are large number of employees, and if he employer desires to have all the policies of each employer together in our demand list LIC might consider the same provided each employee is allotted a salary roll number and an advice in this regard is sent to LIC. Normally such a facility can ne extended only to institutions where LIC have a minimum of at least 500 policies. However, each case will be considered on its merits.
8. Deductions in each month wi8ll have to be remitted to the Office of the Corporation servicing the employer SSS, within a week from date of making deductions lony with copy of LIC Demand list and reconciliation statement . The Cheque should written as payable to LIC of India and send along with the copy of the invoice of the employer own statement drawn in the form supplied by lic. While checking LIC demand list if the employer find that the recovery gas b it been made for any item, rule through the item, on the original statement and note the reasons for the non-payment against the items in the remarks column. If the employer finds that an addition is to be made, make the addition at the end of the statement giving Policy Number, name ,amount and the reason for addition. If the employee is transferred from one department to another or from one office to the other the name of the concerned departments and/or the office and the Paying authority code Number, if available, must be stated.
9. A Consolidated receipt is issued to the employer for the total remittance and thereafter the amount is appropriated to the respective policies at our end.
10. The employer will find from the above that the LIC monthly demand invoice is ONLY for the purpose of your reconciling and sending the collection to lic and NOT For arranging the recovery from salaries. The employer will, Therefore, appreciate that of recovering the premiums there is not need to wait for Demand invoice s from the LIC.
11. As stated above the monthly Demand next by LIC in duplicate is intended ofr reconciliation and payment of collections to LIC. In case employer do not get the demands even at the time of employee payment, although LIC do not anticipate any such instance, some cases of lose in postal transit have been brought to LIC’s notice, the collections need not be with held at employer end. They may be sent LIC reconciling with the amount paid for the previous month, giving the additions and for deletion, if any.
12. IT is necessary to inform the Corporation when an employee leave the service or it transferred from one office or department to another. While informing the transfers, the name of Office or Department and the one where he was working before must be given.
13. The department will make change in the demand list based on the information received from the employer regarding transfer –in and transfer-out and exite, for which may be specified.
14. In between the date on which the change occurs and the date on which this has been given affected to in out demand, there is likely to be some time lag. Therefore, even if the policyholder’s name does not appear in the Demand List the regular monthly deduction should be continued as long as the Authority for deduction is not withdrawn by the employee. By doing this only the policy holder’s interest be fully protected.
15. IF a person is transferred to any other offices of the employers establishment where the Salary saving scheme is operating, the employee will be entitled to the facility of premium deduction. Information of such transfers must be communicated to LIC at once tp take necessary action .
16. In order to bring the demand updated it is desirable the employer informs LIC to all the change in the staff immediately they occur. The employer need not wait to incorporate these in the demands as more often. The changes communicate to LIC through involves in a routine manner are receive late and the names of the employees to appear in the wrong invoice in the meanwhile
17. If there is any difficulty, in preparing reconciliation statement or information on any other matter is required, the employer may contact Life Insurance Corporation Branch Manager. .