Eight years ago, Life Insurance Corporation (LIC), known for its ubiquitous agents, was working on a strategy for using new marketing channels. The idea of having a direct channel - entailing sale of policies through phone calls, internet, direct meetings, etc, instead of through agents - was born. The management asked Usha Sangwan, then an executive director, to implement the project. She was ready with the blueprint - involving systems, technology and people - in four months. In three years, the channel was helping LIC earn Rs 500 crore premium a year. It is being scaled up along with other channels such as agents, online and bancassurance. "Once you are in a leadership position and want to be ahead of the curve, you have to see changes from the macro perspective," she says.
Sangwan is part of the top team working to make LIC ready for the future. After Chairman S.K. Roy put in his papers abruptly, it is now entirely between the two managing directors, Sangwan and V.K. Sharma, to run the company, which has stood tall despite stiff competition from private players over the past one-and-a-half decades.It earned total income of Rs 4,31,435 crore and surplus of Rs 2,501 crore in 2015/16. Its life fund is around Rs 20.57 lakh crore, equal to the Central government's budgeted expenditure for 2016/17. Its market share in first-year premium is close to 70 per cent.
During her decades long association with LIC, Sangwan has proved her foresightedness many times. For instance, she was instrumental in pushing LIC to come out with a social media strategy. There were a lot of apprehensions in the minds of employees about this. "There is no choice in today's world. You have to listen to tech-savvy customers on these platforms and address their issues," says Sangwan, who is personally driving LIC's social media initiative. LIC's Facebook account has around 5.7 million 'likes'.
Similarly, during her stint at the home loan subsidiary, LIC Housing Finance, she took several steps to improve asset quality. There was, she felt, not much awareness about risk back then. She introduced a model to price risk correctly. "You have to understand the DNA of the business you are in," says Sangwan, who improved underwriting standards at LIC Housing Finance. She also delinked the marketing function from recovery operations. "Recovery requires specialised knowledge," she says. She faced some resistance initially but, over the years, her successors at LIC Housing Finance have built on the foundation laid by her in the early 2000s. Today, the company's non-performing assets are among the lowest in the industry.
In her long career, Sangwan, who studied economics and human resources, has taken every assignment as a challenge and built upon whatever she inherited. During one of her early stints in New Delhi, she was the only woman officer in the marketing department in all 112 divisions. Soon after she took over, her division became the No. 2 in volume terms. Next, she was posted to the personnel department, which gave her an entirely new perspective. "I was able to see the organisation from the point of view of employees. This helped me include their aspirations in decision making," she says.
Sangwan says accessibility, responsiveness and proactive decision making will help the company do well in spite of the fast-changing competitive landscape. LIC, she says, is already working on 24x7 availability. "We have put up a system under which every complaint is analysed from all angles, including system/process failure," she says. On proactive decision making, she says, "You should be there for the customer even when he is not thinking about you." LIC has also shifted to the mobile alert system. It has started a drive to get customers' mobile numbers and validate them. "Getting 300 million mobile numbers and getting them validated is a big challenge," she says. Last year, LIC stopped making cheque payments. This means money for millions of claims is now directly transferred to bank accounts of policyholders/survivors. "We have to do everything on a massive scale because of our sheer numbers," says Sangwan.
Still, there are challenges galore. First, the private players, with no legacy issues, are becoming profitable. They are also using digital channels to sell policies. Sangwan agrees that the digital channel will grow fast over the next few years and is preparing LIC for that. "Branches will become leaner. In fact, we are not opening branches anymore. We are opening only satellite offices," she says, adding, "We are also keeping a close eye on profitability of our offices."
LIC is already selling two policies online - pension and term insurance policy. She says people are buying Rs 20 lakh to Rs 1 crore policies online. "They trust LIC," she says. The corporation also has a mobile app. She says the challenge is to make the customer aware of LIC's digital presence.
LIC is also empowering professional agents. "Our agents are opening their own offices. Our development officers are also opening offices. We are using all the resources available to us," says Sangwan.
LIC has a large Class III/IV workforce. But Sangwan says there is no surplus. "The ratio is high as our major operations are at the branch level. There is a lot of paperwork and so we require people," she says. She says LIC will continue to redeploy its workforce into revenue generating activities. In the 90s, too, when public sector banks came out with voluntary retirement schemes and retrenched staff, LIC chose to redeploy its people. "Loyalty, commitment and integrity are the three main qualities of LIC employees," she says.
Sangwan is now busy working with the top management to spell out the vision for 2030. "We should be able to cover every insurable person. I should be able to take the customer base from 30 crore to at least 100 crore," she says.