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Competitive Strategies Case Study

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Case Title:

LIC-FACING PRIVATE SECTOR

Publication Year : 2006

Authors: Sandeep Varma, Doris John

Industry: Banking, Insurance and Financial Services

Region:India

Case Code: COM0144C

Teaching Note: Available

Structured Assignment: Not Available

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Abstract:
The case is about the various changes that happened in the Indian Life Insurance sector after privatisation. Till privatisation, Life Insurance Corporation of India (LIC) was the only company providing life insurance services in India. LIC sold its policies as tax instruments and not as products giving protection against risk. Most of the customers were under-insured with no flexibility or transparency in the services provided. Before the entry of private players insurance penetration and awareness was very low especially in rural India

The insurance sector opened up for competition from private insurance companies with the enactment of the Insurance Regulatory and Development Authority (IRDA) Act, 1999. As per the provisions of the Act, the IRDA was established on April 19, 2000. This marked the beginning of liberalization of the Indian insurance sector. By 2006, there were 14 private insurers in India whose market share was increasing every year. Innovative products, smart marketing and aggressive distribution helped the private sector grow within a very short period. Slowly but steadily, awareness about insurance was also increasing in India. The increase in penetration and awareness could be attributed to the stiff competition generated among public and private players.

As a result of competition posed by the private insurers, LIC launched many new products, improved their services and increased expenditure on advertising. The case facilitates discussion on the strategies to be adopted by LIC to stay ahead of competition. It could also be used to discuss the future of the Indian Life -Insurance sector.

Pedagogical Objectives:

  • What are the strategies adopted by private life insurers to grab market share from LIC?
  • How should LIC use its strengths to maintain the market share it had in the life insurance market?
  • What is the future of life insurance in India?
  • LIC could join with some private insurers.

Keywords : Life Insurance Corporation of India- LIC; Life insurance industry in India; Monopoly player; Competitive Strategies Case Study; Private insurers in India; Privatisation; Competition; Marketing; Distribution channels in Insurance; Bancassurance; Rural market; Strategy; Product innovation; Need based selling approach; IRDA; Unit Linked Insurance Plans-ULIP

Contents : 
History Of Life Insurance In India
Insurance Regulatory & Development Authority, Irda
Life Insurance Corporation Of India (Lic) And Private Insurers
Need-Based Selling Approach
Unit Linked Insurance Plans, Ulips
Sahara India Life Insurance Company Ltd.

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