The Life Insurance Corporation of India has outlined a two-pronged strategy to take on competition to regain its market share of over 90 per cent. LIC wants to beat the private players in their own gameplan -- in the metros and with the sale of unit-linked insurance plans. 
 
"The 10-year plan of LIC is to get 90 per cent of the market share," said R K Vashishtha, managing director. Private players have seen growth rates of 200-300 per cent, thereby bringing down LIC's market share to 87 per cent in 2003-04 against 94 per cent plus in the preceding fiscal. 
 
The idea is to focus on metros where LIC is seen losing greater market share. "Competition is in the sense that LIC agents are not approaching high networth individuals," said Vashishtha, adding that they are first being approached by private insurance agents. 
 
The combined market share of private insurance companies in the key metros is as high as 30 to 40 per cent, according to insurance analysts. LIC proposes to fight the first battle in the metros armed with a battalion of professional agents from the cadre of chartered accounts, lawyers, and company secretaries. 
 
"The initial four-five years will see immense growth of private insurers, but this is more on account of the base being small," Vashishtha said. When the market matures, growth rates of the private sector will come down, and "the arithmetical share of LIC will go up again," he added. 
 
"We are scouting for professionals such as chartered accountants and lawyers, because these people are in touch with the super rich group of the country. We are trying to tap this group of prospective customers as they do not know how to spend their money and hence need professional consultative advise," Vashishtha said. 
 
The 'professional' agent will be out targeting high networth individual (HNIs), armed with the best of training and the latest of gadgets -- such as palm tops, think-pads -- and will get all the support from the organisation in terms of hand-holding. 
 
HNIs are seen buying large-sized policies and concentrated mostly in key metro cities. "We aim to double the average premium income from the metros from the current Rs 5,000 to Rs 9,000-10,000," said Vashishtha. 
 
LIC's plans to come out with two more unit-linked products will further help shore up average premium income. Some private insurers' average premium exceeds Rs 20,000 as in the case of Birla Sun Life Insurance Company and OM Kotak Mahindra Life Insurance. 
 
Even smaller players such as AMP Sanmar Life Insurance have an average premium income of Rs 16,000 compared with LIC's overall average of Rs 3,200. 
 
"We propose to launch two new unit-linked plans -- endowment unit-linked which will offer greater flexibility as the term will not be fixed, and a pension unit-linked plan," Vashishtha said.