The Future of Insurance Lies In Awareness, Accessibility & Trust.

[00:00:00]Thank you so much Mr. Ratnakar Patnaik, who is the managing director of Life Insurance Corporation of India.

[00:00:08]And I think uh if you look at some of the most credible and some of the most iconic brands uh I'm sure that LIC would be one of the um prime among those.

[00:00:22]And for no small reason, because LIC has got over 300 million policy holders. Uh it is the largest institutional investor. It controls uh 71% of total life insurance industry assets. It has an assets under management of uh some 47 lakh crore. And these are some of the numbers that came up.

[00:00:44]Uh but sir, uh to you, the first question would be is LIC has completed 70 years.

[00:00:52]And uh its story has been inseparable from India's growth story.

[00:00:58]So, as you look at the new uh generation, you know, the you need new ways of uh attracting maybe the younger force, women, others.

[00:01:11]So, I'd like to know from you, you know, what are the new measures you are taking? The new uh modernization drive that you are, you know, planning the the drive for towards innovation. Maybe you could start there.

[00:01:24]>> Uh thank you Mr. Arun. Uh thank you for having invited me to this uh talk. And I would like to thank you for uh saying good words about LIC. And we are here for last 70 years. Come 1st September, we are going to complete seven decades of meaningful existence in nation building. And and I would like to correct uh we manage around 58 lakh crores of AUM as on 31st March 2026.

[00:01:54]And you are right.

[00:01:55]Uh India has a very back of envelope calculation. I can say the number of people insurable at this point of time will be around 98 crores, but we are having around 27 crores of policies, but if you you take the policy holders and all sectors put together, we have around 30 little over 30 crores of policy holders being covered.

[00:02:20]But coming to your question of what we are doing for the young gender And the recent survey says around 100 million youngsters who are below 35, tech-savvy, they know how to calculate IRR, and they know the investment details of the company where the company is investing. They are waiting eagerly to be insured. Either they don't have insurance or they are not adequately insured.

[00:02:46]So, that way 100 million, it is 10 crores of youngsters are waiting to be insured.

[00:02:52]Being a LIC life insurer for last 35 years, having worked across the country in different parts of the country, I'm sure we have to necessarily bring these youngsters to our fold. And there is a misconception key youngsters are not getting alienated from LIC, but our data shows most of the youngsters, if not 100%, but at least 50% of our youngsters are with us today. And we are aware of the fact they will not come to us just because we are 70 years old.

[00:03:25]They will come to us if I can provide them the ease of doing business and the speed of doing business. I know at home two grown-up children, I see how when I ask a question about their preference for any life insurance company, they don't say immediately LIC. They think they say key we shall think and let you know where we shall be going. So, to cover this section of the society around the youngsters, the generation millennials.

[00:03:55]We are naturally agree with me. We are coming with the digital innovation and value enhancement. There's a project our former chairman had taken and that we are pursuing die project. It will help us to reach to the unreached. And we are having a customer app called My LIC app.

[00:04:15]I would request all of you present here must be policy holder with us. Please download the app and you'll see the latest features we have added.

[00:04:24]Secondly, coming to the intermediaries, LIC has around 15 lakhs of agents working today across the length and breadth of the country.

[00:04:34]And we have having a beautiful app for them that is called super sales app the app. And there agent, he may be at Jorhat, he may be at Kanyakumari, he may be at Rajkot, but the way it connects with the insurance their company and the customers, it is really unique to be seen to be believed.

[00:04:54]>> Was it developed in-house or >> It is we had some consultants, but some are partly from outside vendors and many of the features, many of the projects are developed from in-house assets, in-house knowledge.

[00:05:10]>> Great. I mean, that was a lot of big eye-opener with all the numbers that you have talked about.

[00:05:17]Uh now coming to some bare facts in the sense that despite India being um the 10th largest in the world, uh we significantly are under insured.

[00:05:33]And the penetration is just you know, some 3.8% of the GDP.

[00:05:38]>> [clears throat] >> So, if you could let me know as to why you know, we are unable to get into a larger, you know, penetration. What is holding us back?

[00:05:51]Because, you know, if you if you look at insurance, I mean, there is no doubt that that is something which um really needs to be uh taken care of. I mean, nobody would have any second thoughts that be it life insurance or health insurance, but, you know, the penetration remains low.

[00:06:10]So, maybe we'd like to know from you what are the reasons for that and what are the solutions also.

[00:06:14]>> Yeah, very rightly asked. Maybe one thing immediately what crosses my mind is sometimes the GDP grows faster than the insurance premium growth rate.

[00:06:24]That's how the penetration levels and it is 3.8, Mr. Arun. It is life non-life put together. If you see alone life insurance, it's only 2.8% of the GDP.

[00:06:36]And I would as a life insurer for three and a half decades, I I have got a different view of these things like penetration, protection gap, and the density.

[00:06:49]Penetration is something a function to the GDP upon GDP.

[00:06:54]And as far as the density is concerned, it is per capita premium someone pays.

[00:06:59]But as a life insurer, I am more worried about the protection gap.

[00:07:04]I I was just going through the data published data of 2024-25 of IRDA.

[00:07:11]The average death claim paid during that year per policy is only 3 lakh 30,000 rupees.

[00:07:20]If you come to my company alone for the year 2025-26, the per policy death claim settled is only 2 lakh 40,000 rupees. So, that way penetration is fine. It is sometimes you are having different types of policies.

[00:07:37]Annuities are there. ULIPs are there.

[00:07:39]Single premium policies are there. They are most welcome. We will take care of penetration and I'll come how we are going to do that. And as far as density is concerned, it is around $90 per person. It is also low. But as far as the protection gap is concerned, some recent survey, if I remember correctly, the protection gap in India today is around 83%.

[00:08:04]Well, putting in very simple words, someone needs 1 lakh of insurance, it hardly has got 17,000 rupees of insurance. So that way, I strongly believe innovative products, a life in in quite a few seminars, it is being argued argued, debated here we should have very simple products. But I have got a question here. I have got a suggestion here. Insurance product cannot be feature-rich as well as simple at the same time.

[00:08:32]If you want more features, we have to reach to the customers and for that I need to train my agents to force that way. So that the products have to be innovative. It cannot be plain vanilla products. We had enough of products and other companies too have. So I need to have some products which are innovative.

[00:08:52]They will appeal to the youngsters. Like recently last year we had a policy called Bima Lakshmi.

[00:08:58]It is only for women and we brought in lot of new features into that.

[00:09:03]To just mention one feature key, this every 2 years the lady insured will be getting some payouts from LIC.

[00:09:11]So this is this is what the innovation is called. We are having a online product where the minimum sum assured to cater to the millennials of the metropolitan big cities. It is called Bima Kavach and the minimum sum assured is 2 crores. And it is completed totally online paperless onboarding of term insurance of 2 crores. From any corner of the country, anyone can onboard and it will be completed hassle-free. So, my my coming to your point as far as penetration is concerned, we have to have good products, innovative products.

[00:09:49]Similarly, we have to have very good training programs for our field force. We are very proud of the 1,450,000 agents we have.

[00:10:01]Come what may, whatever they are, wherever they are, however educated more or less they are, but they have seen this mighty corporation for last 70 years. Even today, a large chunk of the business is procured by the tied channels. Having said that, we have got necessary emphasis on other alternate channels, cost-effective channels. But, coming to that, agents' training, products, and we should have those kind of intermediaries.

[00:10:30]Agency is a carrier.

[00:10:32]All said and done, even today in India, people don't accept life insurance agency as a profession. Slowly, things have changed and today we are going to reach to a situation where people, youngsters, will voluntarily come and accept life agency, life insurance agency as a carrier. So, these are the few things, training, good recruitment, good products, is going to give the necessary fillip for the gap, protection gap, as well as the low penetration levels.

[00:11:03]>> Great. Mr. Patnaik, you know, there is a lot of interest around investing. You know, we have this whole session, in fact, you know, there were so many speakers who and and so many topics that were discussed from mutual funds to gold to real estate, etc., etc. Um now, when it comes to insurance-linked, you know, investment products also, there has been interest as well as there are concerns on this on this front.

[00:11:30]Um do you think, you know, the kind of progress that has been made on that front is satisfactory? Is there something more? How do you address some of the concerns that are there?

[00:11:41]What is your view on that?

[00:11:43]>> Yeah, Mr. Arun, as far as investment related insurance products, I can put it safely as ULIPs.

[00:11:49]Yeah, ULIP market is around last last updated, it's around 7.5 lakh crores in India. And LIC has also had a very good run in ULIP policies, but today as far as ULIP policies are concerned, we are very very cautious about misselling. So, we are very careful and we are promising what is possible. It's not that key a ULIP product will always fetch you For example, the markets the choppy markets now. So, that has brought down the NAV sizably, but our customers, we have brought in the concept the regulator has brought in the minimum lock-in period.

[00:12:30]Earlier, it used to be a lot of bleeding of the fund because there was no lock-in period of the investments. Today, there is a lock-in period, there are regulations, it is regulated properly.

[00:12:39]So, as far as ULIPs are concerned, and I see one trend, the youngsters are more interested in investment plus insurance.

[00:12:48]So, some somewhere we call it like ULIPs. It is term as well as ULIPs put together. So, that gives investment returns as well as the required coverage to the youngsters. Mostly, youngsters are interested in ULIPs. We are having some good products and we are thinking of bringing few more ULIP products which will be with many fund options so that the young generation are attracted to ULIP policies again.

[00:13:16]>> Okay, so that part is also showing a lot of promise according to you.

[00:13:21]Uh I'd like to come to the technology part because nothing of this kind of scale is possible without you know leveraging technology. And now we have you know so many technological advancements including the advances in AI. We just had a session on AI before this and deliberately so because you know without including the kind of steps and the progress in AI, you know, you can't really talk about anything. So maybe in the insurance sector and especially with regard to LIC if you could throw some light on the technology developments that are happening and how it is reshaping the way you reach out to your customers.

[00:14:03]>> Yeah, as far as technology is concerned, we have started with this die project as I was mentioned in the beginning and online paperless onboarding. I'm happy to inform you last year around more than 23 lakhs of policies, it was onboarded paperless.

[00:14:22]And this year we have taken a very ambitious target of around 1 crore policies to be onboarded paperless. 1 crore policies. Our target is more than 2 crore policies for the current year and we are planning around 1 crore policies. For this we need the technology in place. And the die project and the customer LIC customer app, super sales app the app for the agents, all this put together, it is being coordinated and I can foresee very easily within 5 to 6 minutes a customer can onboard and get the e-policy within 10 minutes. Uh And we are trying for some other AI technologies, some other technologies in place like optical character recognition, a manuscripted proposal form can be automatically scanned and it can be converted into editable data at one scan and upload. So that kind of technology we are looking into and that will help us to save lot of time in keying in the details of the customer.

[00:15:29]The proposal will be simple, it will be scanned, and it will be uploaded, and it will convert this manuscripted proposal form into editable data text formats. So, that is going to ease that ease of doing business and ease of onboarding.

[00:15:45]>> So, it will be a very mammoth task because considering the scale that LIC is uh has I mean the kind of progress that you're making. Uh Another question I wanted to ask you is about the 100% FDI in insurance under the automatic route that has now been allowed.

[00:16:07]Uh we have seen how, you know, different uh measures taken by the the government has sort of uh energized the segment. Uh we have also seen the listing of LIC, which was a very historic event in itself. Maybe you could just give us some idea of one, of course, the the listing, the post-listing scenario, and number two, uh how these kinds of this kind of a measure would impact the segment and what we need to look forward to.

[00:16:38]>> Yeah, as far as FDI is concerned, we welcome the decision of government of India.

[00:16:44]And we are eagerly waiting because it's not the first time. Initially, it started with 26%, 49%, 74%, now 100% FDI. So, direct route. So, we are waiting, and once these big players of life insurance come to this country, and we will be benefited by the technology they will bring in, the awareness they will bring in, the underwriting legacy, the underwriting expertise they will bring in. That is really going to help us. Being a big insurance company, we are eagerly waiting, and we welcome, and whatever funds will come, that is also will help for the capital building of this country. But as far as the IPO, we are now almost 4 years 2 months old post listing 22nd May 2000 17th May 2022.

[00:17:32]And you might have seen the ups and downs and recently we had bonus issue too. And I am hopeful the way we have started current year, the business the core business performance of our corporation as on 31st March has shown more than the budgeted growth in many important parameters. So that is going to change up the perception of an average investor towards the long-term investment he has contemplated in a company called LIC.

[00:18:03]>> Excellent.

[00:18:05]You know, there are going to be so many youngsters especially on the digital front who are going to view this and if there would be a message of advice that you need to you would give them, you know, to get them into insurance, what would it would it be?

[00:18:19]>> Yeah, I would say one experience I've seen many of the youngsters they on board with good policy but the persistence levels are not good. Today they on board with a particular company next year they change the company they treat life insurance as vehicle insurance because term insurance only annual contract. I would request the youngsters watching this program keep please stay with a good company preferably the choice of the nation that is LIC of India. Stay with them. Keep your policy up to date. Let God forbid for a bad day your family should not be deprived of any insurance benefits that we have been promising for last 70 years.

[00:19:02]>> Okay, on that note thank you so much sir for being with us. Um