LIC Enters into Marketing Tie-Up with Policybazaar
Just a week ahead of filing for its mega IPO, LIC has announced a tie-up with India’s largest online digital insurance selling portal for marketing products of LIC through the Policybazaar channel. Policybazaar is a digital interface of PB Fintech, which is already a listed company on the stock exchanges. Policybazaar offers an agnostic platform to sell insurance products to customers based on a strong advisory component and comparison facility.
This is expected to widen the reach of LIC and make it an omni channel offering catering to customers via the traditional feet on street sales persons as well as the digital market place. While LIC is a pioneer in offering life insurance products in India and has a dominant 70% market share in life products, Policybazaar is the largest online aggregator for insurance in India. It would be a synergistic tie up for both; LIC and also for Policybazaar.
LIC wants to leverage the Policybazaar digital distribution channels not only to sell its insurance products but to also accelerate insurance awareness and penetration across the length and breadth of India.
Despite LIC having more than 25 crore policyholders in India, the overall penetration in numbers is too low compared to other Asian countries. This gap can be corrected by leveraging the digital channel in a meaningful way.
For LIC and for Policybazaar this tie-up would be advantageous in two ways. For LIC, this gives them an omnichannel appeal to young and millennial customers. Additionally, a strong digital customer franchise can also favourably impact valuations of LIC.
For Policybazaar, it gives them the prestige of associating with the largest player in the market. In addition, the existing brand image and penetration of LIC makes it an added advantage for Policybazaar.
Currently, Policybazaar is the largest online insurance marketplace in India and distributes products of 51 insurance companies; across life, general and health. This is in stark contrast to the very proprietary marketing model followed by LIC.
For example, in FY22, the individual agents of LIC sourced 97% of the new business premium (NBP) and has been in the range of 94% to 97% over the last four fiscal years.
LIC is already an omnichannel player in a way. It has its own digital front-end and also leverages its 72 bancassurance partners; which includes 8 PSU banks, 42 co-operative banks, 6 private banks, 13 regional rural banks, and 1 foreign bank.
LIC also has 175 alternative channel partners including insurance marketing firms, 59 brokers and 72 corporate agents; apart from 3,463 micro insurance agents. Policybazaar will enhance this network reach.
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