Jan 14, 2000|
LIC draws up plans to take on competition
The US$ 290 bn Life Insurance Corporation (LIC) has drawn up a three pronged strategy to take on the might of the private sector insurers. The corporation has also commissioned Booz Allen and Hamilton, an international consultancy, to prepare a blue print for structural changes that may be adopted to combat competition. This has been reported by a leading national daily.
LIC's three pronged strategy involves:
- Reducing premiums
- Offering higher returns
- Introduction of new products
LIC also plans to set up a bank in order to expand the scope of its operations.
The fear of intense competition from the international and domestic players seems to be having the desired effect on the public sector insurance companies. The reduction in premiums, higher returns and better products all signal the evolution that is likely to take place in the industry.
The public sector companies seem to be responding well to the imminent competition. The decision to set up a bank and focus on online transactions highlight the desire to leverage on existing strengths, control costs and improve service standards. Given their distributional strength, these companies would be able to significantly improve their competitive advantage vis a vis the competition.
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