Kathmandu: Heavy dependends over traditional distribution channels cost dearer for state-owned Life Insurance Corporation of India (LIC), as it continues to lose the market share.
A recent research report published by Global data reveals that LIC continues loss market share to private insurers such as SBI Life, HDFC Life, ICICI Prudential, and Max Life.
LIC’s its market share has plunged from 71.8% in 2016 to 64.2% in 2020.Top five life insurers cover over 85 percent of market share.
GlobalData’s Insurance Intelligence Center reveals that except LIC, all the top four life insurers have registered double-digit growth during 2016-20.
LIC’s sales growth has slowed down during the last few years due to its high dependence on the traditional agency-led distribution model. Whereas private insurers have a more diversified distribution network mostly adopting the advanced technology. After the outbreak of COVID-19, private players are more focused on creating and adopting new distribution channels while LIC has no strategic plan to develop and adopt new channels for life insurance sales.
The report says that in 2020, over 94% of LIC’s first-year premiums were generated through agents and insurance advisors.While private players have collected remarkable amount of new business through bancassurance, digital marketing, use of AI etc.