Page 10 - Insurance Times July 2016

LIC of India

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LIC Chairman S K Roy resigns before term ends LIC to set up credit en-
hancement fund shortly
S.K. Roy, the head of reasons for the resignation. Roy had
Life Insurance Corp been with the insurer more than three LIC will "shortly" announce setting
(LIC), the biggest decades after rising through the ranks up of a credit
single investor in the to be appointed Chairman in 2013. enhancement
country, has tendered fund to provide
his resignation two years before his Under his leadership, LIC has stuck to guarantees for
term was due to end. its traditionally cautious investment ap- infrastructure
proach. The insurer is the largest single sector compa-
Roy has written to the finance minis- investor in stocks in India and holds
try but his resignation is yet to be con- close to 18 trillion rupees ($267.25 bil- nies to help them access funds from
firmed, said a senior executive at the lion) in assets. Roy also has been head domestic and overseas markets at
insurer, as also a senior government of LIC at a time of rising competition lower cost.
official. The sources did not know the from private insurers.
"We expect LIC to announce it
Customers loyal to LIC the most, followed by Kotak Life shortly," Secretary in the Depart-
ment of Economic Affairs
Life Insurance Corporation of India (LIC) turns and affordability on the products Shaktikanta Das said.
has held on to its position as a brand were more in line with the expecta-
that customers are most loyal to, but it tions. Together, improvement in service When asked about the impact of this
is fast losing the huge lead it once had and the nature of the product have move, he said if infrastructure sec-
over private sector brands in tor companies "get a credit en-
the business. LIC is followed by contributed to higher levels of hancement, they will be able to ac-
Kotak Life at number two and brand satisfaction and loyalty. cess funds from the market both
Bharti AXA Life/ SBI Life Insur- domestic and overseas at lower cost
ance (joint third spot) accord- Satisfied customers are because of the credit enhancement
ing to Insurance India 2016, a more loyal, the numbers in- which they get." The infrastructure
study by IMRB International, dicate. Among insurers, companies, Das said will be able to
which has also found that HDFC Life gained the most in leverage on this and get credit en-
about seven in ten customers (69 per loyalty over 2015, followed hancement.
cent) are 'loyal' to their insurance pro- by Kotak Life Insurance.
vider, up from 60 per cent last year. Praveen Nijhara, VP, IMRB-Stake- The fund would help in raising the
holder Management unit said, "It is credit rating of bonds floated by in-
In a customer satisfaction survey con- evident that private players have made frastructure companies and facili-
ducted as part of the study, customers inroads into building customer loyalty tate investment from long term in-
also said that they were more satisfied by delivering positive and consistent vestors.
with their insurers as compared to 2015. experiences." Nijhara likens this to the
Satisfaction was a direct outcome of telecom industry, where it took more The move assumes significance as
better products, greater adequacy of than a couple of years for private sec- infra firms are finding it difficult to
riders and a general consensus that re- tor players like Airtel, Vodafone, Tata raise adequate funds at competitive
and Reliance to find their groove. which are needed for projects with
long gestation period.

10 The Insurance Times, July 2016