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Friday, August 29, 2014


Dear Friends,

I wish a warm and hearty welcome to each one of you present here today for this Information Sharing Session. This is the second meeting for the wage revision and first in the current year. I extend my appreciation for your support during the previous Financial year. I also wish to share with you my views on the present status of our Organisation and expected developments during the forthcoming years.

Financial Sector Scenario:
The economies and the financial policies of a country are intricately linked with what is going round at the global level. In the Budget for 2014-15, the Hon’ble Finance Minister has made the following announcements which impact us:-

a) Limit u/s 80C has been increased from 1 lac to 1.5 lac
b) Housing loan interest rebate increased from 1.5 lac to 2 lac- More money in the hands of people
c) PPF limit increased to 1.5 lac- may neutralize the +ve impact of enhanced 80C limit
d) Proposal to hike FDI limit in Insurance to 49%
e) Aim to provide all household with banking facility- this will boost financial inclusion.

After getting access to the banking, insurance will be the next financial product required by the


people.
You are aware that the Union cabinet has approved a proposal to ease foreign direct investment (FDI) limit in the domestic insurance sector to 49% from 26%. This signals
Government’s intent to draw capital and investment into an economy that is struggling to
claw out of a crippling slowdown. As of now the Bill has been referred to Select Committee. However, whatever the outcome, Corporation has to be prepared for all eventualities. Historically, we have performed exceedingly well inspite of competition. But this time the competition is going to be more intense as our competitors are equipped with almost 14 years of experience of the Indian insurance market.
Friends, we are sailing through the era where change is so fast that sometimes it even outpaces the minds and anticipations of celebrated economists. The overall economic situation of the country has been the matter of concern for all. Government and all the stakeholders are trying to rein the situation and boost the growth which had gone down to below 5%. Green shoots of revival are visible and we are of the belief that the India growth story has just started and has enough domestic drivers to grow exceptionally for several decades. We need to leverage this growth potential for the benefit of our Organization and policy holders. We need to be ready with all our resources and commitment to be not only the part of this growth but also to act as Growth driver.


Insurance Sector and LIC –
As I mentioned earlier, Indian insurance market is presently not what it was a decade back. Companies have established their foothold in the market and many of them have started showing profits as well. With the experience of almost one and half decade, now they have better understanding of “how to do business in India”.
Many regulatory developments during last 4-5 years have brought a sea-change in insurance market in India. New product guidelines are in place. Many other initiatives regarding the protection of interests of policy holders and bringing greater transparency in the market have been introduced. These developments are good for the industry but require swiftness in action and change in strategies to cope with it. We being a mammoth organization, communicating changes down the line to each employee and agent and then making them ready for the changed scenario, takes time.
In my view, differentiation in terms of product may not be the key to maintain the leadership position in future. Products are being replicated and will be replicated in future.
The next war in Indian insurance market may be fought on ‘Service differentiation’. This is
going to be the crucial factor for maintaining our position of ‘Preferred insurer’. In such war, skilled and committed sales and administrative manpower which should be having the attitude and aptitude to understand the expectations of customers well in advance and respond to them in a manner unprecedented for him, is an essential element.
Agency recruitment and retention had been the issue of concern for us during last few years. As on 31st July, 2014 we are still showing de-growth in Net agency strength. Apart from expanding the size of agency force, transforming them into a skilled and professional force for the next level of competition will acquire greater importance in coming years.

Our knowledgeable staff and field force are a great strength. This strength has to be strengthen further constantly in terms of upgrading their skills and their availability to the customers. We need to constantly upgrade our technology and the people using that technology to provide an unparalleled experience to the customers. We, as a leader of the market have to start this change as we do not have the option to remain complacent. We have to redefine our manpower distribution practices and work distribution practices. Each and every employee should be equipped with the knowledge and technology to render all the standard services customer may expect from the organization. It is not a matter of our convenience but the preference would be to the convenience of the customers. Our survival and pole position will fully depend on the opinion of customers about our servicing standards and his perception towards our sensitivity for their issues.
The time has come for us to start taking steps to synergize our activities with the changing
environment. Apart from the redistribution of work force, we need to work on improving the
overall experience of the customer whenever he chooses to visit the branch. A clean, modern and tidy look in our branches has to be created and maintained. Such a modern
look coupled with the impeccable services rendered by an employee in an empathetic way, can provide an experience to the customer which will go a long way for maintaining his loyalty. Any organization is strong only till the time it remains relevant in the eyes of its customers. Changing loyalty may prove catastrophic for any service organization and in service organization loyalty of customers changes very fast.
On the technology upgradation front, I proposed during our last session about the introduction of the Biometric system for Password. This will not only address the issue of many password frauds that happened in the Corporation but also smoothen and expedite the process of servicing. Moreover, this is the upcoming technology and we cannot shy away from it.


Our performance:
For the year 2014-15, we have taken the budget of 3.68 crore individual policies and Rs.35,000 crore FPI. The first quarter of the current fiscal has been good for us. As on 31st July 2014, Corporation has procured 6580.56 crore FPI under 41.36 lakh policies thereby registering a growth of 5.63 % in FPI. However, there is de-growth of 46.73% in NOP. The A2B in NOP & FPI is 11.24 % & 18.80 % respectively.

As of now we have 12 products in the individual category and have done better than quarter one last year, when we had 48 products. Recently ‘Varistha Pension Bima Yojna’ has again been introduced by Govt. to be administered by LIC. This shows the faith of the Government in us. We have also introduced another new plan “Jeevan Rakshak” and expect the market will receive it well.
The excellent performance in P&GS deserves a mention here. For the last couple of years, our Pension & Group Schemes Department has been a major contributor for the Corporation. We are very proud of the fact that all the large corporates in the country repose their trust in us to manage their liabilities or their funds.


Claim Settlement:
Claims performance was extra-ordinary with 99.68% Maturity/SB and 99.30% Death Claims having been settled. One of the major elements for retaining the market share as well as customer’s trust is our outstanding claims performance. However, speed ratio is an area of concern as the entire claim performance will depend on timely dispatch of intimations. Claim settlement offers immense marketing opportunities as well as opportunities to generate goodwill and strengthen Brand LIC. This being so, we should observe very high standards of professionalism and ethical processes while settling claims.

Recruitment:
You are aware that we have regularised all regular part-time sweepers as Sweeper cum attendants. Our future recruitments will be need based and in the areas of our core activities.


Sports Activity:
As far as sports activity is concerned, six Sports Disciplines are covered in All India LIC
Sports. The last round of recruitment under Sports quota was completed in March 2012
with a view to retain competitive excellence in the field of sports and to compete on equal
footing with other organizations. The sports Policy of LIC is under review.


Awards Won & Brand Survey:
During the Financial Year 2013-14 we have won as many as 31 awards. Some of the notable awards being Readers Digest Trusted Brand, Skoch Renaissance Award, Outlook Money Award, Annual Greentech CSR Awards and Asian Sustainability Leadership Award. We were also ranked among “Top-10 Most Trusted Brands in India” and were voted as No. 1 “Most Trusted Insurance Brand” in the ET Brand Equity-Nielsen Survey-2013. It has been a great achievement year for LIC.

New initiatives:
It is proposed to take new initiatives in Direct Marketing like On-line marketing to start in a
significant manner. We have launched ‘e-Term’ product recently and plan to have at least
one product in each category (Annuity/ Endowment/ Children/ Health/ Investment/ ULIP).
We are also planning for Corporate Business Vertical to approach Corporates across India for direct business.


Issues for discussion:
We have to address the following issues to ensure the sustainable growth of our Organization:-

(1) Code of conduct: It is expected that:
(a) Union work shall be done only after office hours.
(b) Holding any kind of meeting, demonstration, slogan shouting, announcement during office hours and/or inside the office premises shall not be resorted to by the Unions and employees.
(2) Improvement in Productivity, Redeployment and Mobility of Workforce: Taking into account the exigencies of the office and the directions from CVC, the employees shall be liable to transfer and/or inter-change of duties, either within the station or outside. Unions may give their suggestions about such redeployment in line with the requirement of the Corporation and practices followed by other


financial institutions.
(3) Adaptation and Upgradation of technology: EDMS project has brought in a new era of servicing. This is going to provide us the convenience for all standard customer services to the customers at one single point. With the use of technology, cases of impersonation and password frauds are on the rise. To address the issue and make the process more secure for employees, we will bring Biometric authorization in place of password. I have already mentioned during my address at the 54th All India Senior Divisional Manager’s Conference that we are working on a system whereby individual employee productivity will be assessed through the Back end.

(4) Customer Orientation: In order to ensure greater customer care, the Corporation will introduce customer friendly measures and implement the same with the co-operation of the Unions. In the light of customer oriented market conditions, initially we propose to introduce
the following customer friendly measures:

• Extension of cash hours by one hour
• Single window servicing concept
• Developing Mini-Offices as ‘Growth Centres’.
• Modern and tidy atmosphere in branches
As in previous year, we will be rolling out HRD/OD program, titled ‘We Can’, this year,
starting 01st September, covering employees and officers from RC to AO.


Offer on wage revision :
Taking a holistic approach of the aspirations and also the presently prevailing conditions, I wish to offer 10.50% as wage rise. I request you to discuss further modalities with Personnel Department. I once again sincerely thank you for the co-operation and contribution you have extended during all these years. I am sure that it will be continued. Thank you.