Academic project with an objective to break conventional and conditioned pattern of thinking and to induce associative thinking by appying learnings from different industries and domiains

2.  Leena Chheda- Financial Analyst and Consultant,
Master Consultancy, Mumbai.
 Amit Ashar- Development Officer, Mumbai.
 Nisarg Shah- Developer
 Pratik Jadhav- Partner, Sunshine Developers,
Mumbai.

4.  Revenue earned in 2009-10: Rs 2.98
lakh crore.
 Total life fund : Rs 10 lakh crore.
 LIC contribution: 3.2% GDP
 Total investment: Rs 10.95 lakh crore.
 Total agents : 14 lakh
 Total Policy holders: Rs 27 crore.
 Total offices: 3000.

5. 15-30% of commission
in first year.
On
premium
and length
of policy 5-7% from second
year.

6.  Advertisement by LIC.
 Advertisement by private players.
 Agents identify the bread winners via succession,
referrals, brokers, corporate agents.
 Regular follow-ups (increase liabilities at every
stage).

7.  Current agent strength : 14 lakhs.
 Empowerment of agents.
 Decreased limit for educational qualification:
Rural: 10th std.
Urban: 12th std.
 Retired government employees .
 Undergo formal training to become authorized
agents.
 100 hours of basic training. + follow up.
 Encouraged to be innovative for acquiring customers.

8. LIC BUSINESS MODEL

9.  Scholarship: Rs 93.05 cr.
 Social security scheme: Rs 3 cr.

10. INVESTMENTS
share market
0%
equity
15%
12% infrastructure and
50% social securities
15%
loans
8%
govt and other
securities
others

11. LIC AS A BUSINESS CORRESPONDENT
What is Business Correspondence ?
Need for Business Correspondent
Why LIC as a Business Correspondent
Revenue Stream for LIC as a BC

12. Business Correspondent is an intermediary
that can carry out the transactions on behalf
of the bank
Financial Inclusion: main objective of a
Business Correspondent

13. 70% of Indian Population stays in rural
Only 40% of Indian Population holds a bank account
Out of 85300 bank branches only 32000 are in rural
73% of farmer households has no access to formal
banking system
Out of 89.1 million famer households, approximately
49% seek credit from money lenders

14. Source: RBI ; article from Business World, 18th July 2011

15. Source: RBI ; article from Business World, 18th July 2011

16. Trust
Brand Image
Highly penetrated
across the country

17. Revenue Stream
Service fees by offering banking facilities
Cross-selling of LIC policies

19.  What is cord blood stem cell banking?
 What diseases does it help curing?
 Why cord blood banking?

20. Process and Model
 Collection
 Processing
 Storage

21. LIC Cord Blood Banking
Initial Investment
Rs 35 Cr
General Administratve
R&D Sales & marketing
costs
Rs 8 Cr Rs. 9 Cr
Rs 18 Cr

22.  ICMR
 25000 sq. ft. lab facility- 1.5 Lakh samples
 24x7x365
 Dual power back up
 Central monitoring
 Advanced safety measures- alarm
system, temperature & fire control, earthquake
proof, sufficiently manned
 Pre-processing infrastructure
 transportation

23.  Slated to increase multi fold due to current lack
of penetration
 Currently at Rs 100 Cr.
 2012- Rs 2700 Cr
 Gross profit margin- 50 to 70 % ( due to greater
revenue contribution from higher margin storage
fees)

24.  Cross selling through policies.
 Advertisements through various media.
 Agent acquisition .

25.  Medical tourism
 Hospitals- private and government.
 Gynecologists, obstetricians.
 Maternity homes.

26.  Rural medical challenges:
 Vast rural population
Availability of quality medical practitioners
 Availability of updated, easy to use information
 Dependable or sustainable model

27.  12% deaths: Tuberculosis
 32% deaths: Cardiovascular
 60% women anemic
 80% babies anemic
 Causes of chronic diseases
 *Smoking *High blood Pressure *Diabetes
 Poor hygiene and sanitation

28.  Setting up of booths at regular intervals.
 Computer loaded with information regarding
 * illnesses * diseases * symptoms * dangers *
home remedies * recovery period
 “human” monitor to clarify procedure
 Video conferencing if required

29.  Medical institutions:
 Pharmaceutical Companies

30.  Awareness → Prevention → Increased Life Span
 Creating Brand Awareness for LIC
 Newer ‘Friendly’ market for insurance policies
(upscaling)

31.  Advertisements on LIC E-Health Interface
 Nominal Service Charges from the users.

32.  67.2% Deaths due to lack of institutional medical
attention
 14.6% Deaths due to no medical attention
 Infant Death Rate: 66%
 Still Birth Rate: 9%

33.  LIC is investing heavily in Real Estate and
Development projects. Owns land as much as
Indian Railways.
 In all 1708 properties worth 20,000 Crores.
 Lands in Tier 1 and Tier 2 cities mostly in Prime
Locations.
 Develops commercial property and in certain
locations residential property to earn rental
income.

34.  Contracts with L & T Construction or Ramky
Infrastructure Limited.
 Engineering, Procurement and Construction activity
for development of: Residential
Complexes, Hospitals, Central Park, Hotel &
Clubs, School, Roads and other infrastructure.
 Tie up with Apollo or Fortis for Hospitals.
 Hotel and Clubs: Indian Hotels Company (IHCL) or
ITC Hotels.
 Schools: Delhi Public School or Billabong High.

35.  Projects around Special Economic Zones (SEZ’s)
 Development of Projects for Economically Weak
Section (EWS) and Slum Rehabilitation.
 Discounts and schemes for Customers holding
LIC Policies.
 Loan Sanctioning to the Middle class (bracket 4
Lacs to 10 lacs) through LIC Housing Finance.

36.  Approximate revenue from housing could start
from 30 Crores to 500 Crores.
 Other Streams of Revenue are:
 Hospitals
 Schools
 Malls and Shopping complexes.
 Rental of Commercial Complexes

37. Reinsurance
•Insurance FOR insurance companies
•Allows them to pass on risks that they cannot, or
do not wish, to absorb themselves.
•By diversifying into Reinsurance,LIC can earn
additional premium from smaller Insurance
companies
•India currently has only 1 Reinsurance company :
GIC Re
Possible channel partners: Smaller Insurance
Companies

38. Market Research
Primary market research
• Is conducted from scratch. It is original and
collected to solve the problem in hand.
• e.g. Surveys
Secondary market research
• Is already existing info
• e.g.
• -census data,
• LIC policy holders’ database

39. Market Research
 Info available with LIC: City/state-wise
demographics with info like:
Diseases
Lifestyle & habits
Profession & income
Education
Etc….

40. Market Research
 Possible channel partners & Revenue Streams
(Client Firms):
FMCG
Telecom
Healthcare
Media , etc…
e.g. HUL, P&G , Cipla, Uninor, Zee TV…

41. • Business Correspondents and Facilitators: Pathway to Financial Inclusion
- Research by RBI, ACCESS and CGAP
• Business World, 18th July, 2011
• www.rbi.org.in
• Irda.gov.in
• Wikipedia.
• IRDA annual reports.
• Stem cell banking: opening new vistas for medical tourism.