LIC chairman rules out VRS

LIC chairman rules out VRS
Press Trust Of India

New Delhi, Jan 14: Moving away from the ‘popular’ trend in public sector, Life Insurance Corporation (LIC) has decided to absorb the extra flab to sustain its growth currently at over 40 per cent and increase its asset to Rs 2,00,000 crore by March 2001.

The corporation has also initiated restructuring as suggested by international consultants Booz Allen & Hamilton to take on the emerging competition from new players like ICICI Prudential Life and HDFC Standard Life.

"We are not thinking of voluntary retirement scheme (VRS)," LIC chairman G N Bajpai told PTI ruling out fears that the financial power house may reduce staff strength further while going in for technology upgradation and computerisation.LIC reduced staff strength to 1,22,867 as on March 2000, as compared to 1,24,385 employees during the end of 1998-99, but revised wage structure to include a ‘productivity linked lumpsum incentive’ scheme last year.

"Instead of VRS, we have chosen the other option a growth model," he said, adding that if there is any extra flab it would be absorbed in the corporation’s growth process.

Bajpai said "the corporation was growing at 44 per cent during the period April-December 2000 as compared to the first nine months of 1999."

LIC expects to grow at about 35 per cent to mop up Rs 60,000 crore in premium income in the next five years.

According to Bajpai, LIC is expected to cross this year’s targeted premium income of Rs 36,100 crore by a ‘fair margin’ as against Rs 27,462 crore last year. LIC’s total income was Rs 44,730 crore last year. The total asset of the corporation was expected to touch 2,00,000 crore by the end of current fiscal as against previous year’s Rs 1,61,002 crore, Bajpai said.

LIC is believed to be carrying out a internal research especially in the financial side to assess the asset-liability mismatches in accordance to the new investment norms stipulated by Insurance Regulatory and Development Authority (IRDA), apart from consumer and market research.

The country’s biggest life insurer has also stepped up training of staff and officials to conform with the IRDA directive that marketing of insurance products could be carried out only by professionals trained in this field.

"We are carrying out training programmes for agents internally from LIC’s 134 institutes spread across the country," Bajpai said.

LIC has about 7,14,600 agents on its roll with over 6,83,000 active agents as on March 2000.

Last year, at least 24,000 employees had undergone training in LIC’s institutes while 19 senior officials were sent abroad for training and attending worshops.Asked about new products, Bajpai said "we will be coming out with more schemes. We are awaiting approval from the IRDA."

He did not reveal the type of products but industry sources said that LIC would come out with new innovative products which were not there in India so far.