Utkarsh News Bulletin of CO Marketing dept., September 2009

(For Private Circulation Only)

Greetings from the Central Office Marketing Dept. On the glorious occasion of the 53rd Insurance Week, let us celebrate our achievements and gear up for a brighter future.

LIC Market Share in July 2009:

In July 2009, our Market Share on FPI count, increased remarkably by 2.41% from 62.45% to 64.86%. On NOP count it has decreased slightly by -0.10% from 69.88% to 69.78%.

Our Market Share in FPI has increased for four months in continuity. Recently, three Competitions (namely Chandrayaan-II in July-09 and Saral Swarnim Suraksha & AAA in August-09) have been launched for the field force. Let us make the best use of these competitions to continue our impressive gains in respect of FPI and NOP both.

LIC Vs. Industry Growth Rate in 07/2009:

Growth Rate FPI Count NOP Count

LIC 32.13% 14.86% Pvt. Insurers -17.59% -2.06%

Industry 9.01% 9.16%

Our Performance in August, 2009:

In August 2009, the Corporation registered growth of 13.19% at FPI count and 19.25% on NOP count. The FPI Growth rate increased a bit but is still far below the budgeted growth.

Top 2 Zones & Divisions on Growth Rate:

Particulars FPI Count NOP Count Topper Zone

WZO, 24.97%

NZO, 31.08%

Runner Up Zone

NZO, 21.25%

NCZO, 26.95%

Topper Division

Delhi-I, 70.84%

Srinagar 61.17%

Runner up Division

Mumbai-I, 66.85%

Udupi, 58.15%

*Bold indicates continuation of / improvement in position.

Grand Achievement of Neyvely B.O.:

Our congratulations to Team Neyvely B.O. and Vellore D.O. Neyvely became the First Branch to achieve NOP target in F.Y. 2009-10 by completing 16830 policies on 24.08.09 against NOP budget of 16,000 policies. We look forward to having many more such Achievers by the time of release of next Issue of Utkarsh.

Saral Swarnim Suraksha- a N.B. Competition for DOs & Agents:

This N.B. Competition for Development Officers and Agents has been launched to encourage them to cover good no. of lives consistently with higher premium in short duration. The policies sold under New Janraksha, Jeevan Saral, and New Bima Gold plans and having SA 1 Lac or more will be considered for this competition. The Competition period is from 1st August, 2009 to 31st January 2010. All Branch Officials are requested to bring this to notice of all Development Officers & Agents.

(Refer Circular Ref.:Mktg/ZD/18/2009 dated 08.08.2009 and Circular Ref.:Mktg/ZD/21/2009 dated 25.08.2009 for details)

Triple A Competition - Arise, Awake & Achieve- for CLIA & Dy / Managers(CLIA):

The CLIA dept. has floated a New Business competition for CLIAs and Deputy / Managers (CLIA). The Competition period is from 1st August, 2009 to 31st October 2009. All Branch Officials are requested to bring this to notice of all Chief Life Insurance Advisors.

(Refer CLIA dept. Circulars dated 31.7.09 for details)

Changes in Recruitment of RCAs by DOs:

To provide stimulus for agents recruitment, the rules have been relaxed. Now while calculating the limit of four RCAs under a Development Officers, only those agents who are recruited under RCA Scheme and are within the stipendiary period i.e. 2 years of his / her agency, will be taken into account.

(Refer Circular Ref.:Mktg/ZD/22/09 dated 27.8.09 for details)

Rules on Allotment of Agents to DOs:

With multiple objectives of arresting high incidence of termination of agents, conserving the already created agency force, to support Probationary Development Officers and to facilitate existing Direct Agents to reach higher level of performance, the Rules on allotment of Agents to Development Officers have been revised.

(Refer Circular Ref.:Mktg/ZD/19/2009 dated 10.08.2009 for details)

Modifications in Rules of Reinstatement and Reappointment of Terminated Agents:

With the objective of conservation of agency force, the existing rules for reinstatement and reappointment of the terminated agents have been modified with immediate effect.

(Refer Circular Ref: CO/Mktg/ZD/26/2009 dated 04.9.2009 for details)

Products of the Month for September 2009 - Jeevan Saral and Profit Plus:

Jeevan Saral, a traditional plan and Profit Plus, a Unit linked plan are Products of the Month for September-2009. Together, these two plans provide optimum combination of affordable risk coverage and diversified asset allocation to our policy holders.

Exercise of Option by CMs Club Members:

The CO Marketing Dept. has announced the Options for CMs Club Members (M.Y. 2008-09).

Apart from three existing Options, namely attending Convention, Visiting a place of choice with spouse and Attending a Training Programme, a new Option of Reimbursement up to Rs.12,000/- for holding Customers Meet and purchasing certain business promotion articles / utilities has been provided.

Now, in the option of visiting a place of choice with spouse, reimbursement may be claimed on the basis of declaration subject to tax deduction.

The Zonal Offices are requested to provide the Options data to CO Marketing dept. by 08.09.2009.

(Refer Circular Letter dated 17.8.09 on CO Mktg. dept. site for details)

Agents PRT: Online Training & Process Flow:

Instructions regarding On-line pre recruitment test training through LICs own VIDYANET server and Process flow for the online pre-recruitment test of prospective agents have been announced.

(Refer CO FPT Circulars dated 06.08.2009 & 13.08.2009 for details)

Merit Lists as on 31st July, 2009

Top 3 Branches on Growth Rate Basis:

Rank FPI Count NOP Count 1st Nurpur, 15 B

438.58%, (NZ) Nurpur, 15 B 440.98%, (NZ)

2nd New Friends Colony, 352.43%, (NZ)

Mandi BO, 167 266.91%, (NZ)

3rd Mandi BO, 167 249.33%, (NZ)

Neyvely, 71E 246.24% (SZ)

Top Ten Development Officers(FPI Count):

Sr. No.

Name FPI (In Rs. Crs.)

1. Shri H.K. Sinha, (NZ) 6.89 2. Shri Harish Gupta (NZ) 5.97 3. Shri G.K. Singh, (NCZ) 5.91 4. Shri S.K. Mathur (WZ) 5.90 5. Shri R. Pradeep (SZ) 4.95 6. Shri Vipin Gupta (NZ) 4.82 7. Shri Govind Gupta, (NZ) 4.57 8. Shri S. Joshi (NZ) 4.38 9. Shri Sanjay Garg, (NZ) 4.37 10. Shri P.P Shetty (WZ) 4.12

Top Ten Agents (FPI Count):

Sr. No.

Name FPI (In Rs. Crs.)

1. Ms. Ragini, (NZ) 6.80 2. Smt. Manisha (NZ) 4.09 3. Ms. R.D. Pal, (NCZ) 4.02 4. Shri H.R. Shah (WZ) 4.00 5. Smt. A. Bhalerao, (NZ) 3.24 6. Shri MRC Rao, (SCZ) 3.12 7. Shri K.V. Paulson (NZ) 2.88 8. Ms. K. Gupta, (NZ) 2.67 9. Smt. R. Aggarwal (NZ) 2.64 10. Shri H.V. Goenka (WZ) 2.63

*Names displayed in Bold indicate continuation of the position or upward movement in the respective Merit List.

Amendments to Agents MBG:

Around 2500 years ago, Heraclitus (540 B.C. 480 B.C.) said that nothing endures but change. Since, then this eternal truth has been rephrased again and again so many times.

How LIC Agents have progressed since 1972:

Below-mentioned figures speak for themselves:

1. Total N.B, in certain Representative F.Y.:

Year Policies S.A.(Crs) FPI (Lac) 1971-72 1895875 1498.05 N.A. 1981-82 2103134 3478.92 10194 1991-92 9238264 32064.44 86169.18 2001-02 23249651 192572.31 1484332.07 2007-08 37589995 275457.65 4381285.77

The MBG provisions, which were introduced in 1972, have been changed w.e.f. 09.07.2009 i.e. after a period of 37 years.

2. Per Agent Average N.B. in these F.Y.:

Year

Average No. of Policies.

Average S.A. (Rs.)

Average FPI (Rs.)

1971-72 11.67 92268.88 N.A.

1981-82 16.88 279231.71 8182.10

1991-92 18.86 654830.69 17597.75

2001-02 29.35 2431124.76 187389.16

2007-08 31.48 2307510.23 367020.54

3. Total No. of Agents in these F.Ys.:

Year Total No. of Agents at F.Y.-end 1971-72 162357 1981-82 124589 1991-92 489660 2001-02 792112 2007-08 1193744

It is observed that from data that since 1972, per Agent average productivity has risen from 11.67 to 31.48 in NOP, from 0.92 Lacs to 23.07 Lacs in respect of S.A. and from less than 0.08 Lacs to 3.67 Lacs in respect of FPI.

The S.A. has grown at CAGR of 9.10% in last 37 years. Assuming Average FYP Rs.7000/- for S.A. I Lac, FYP would grow to Rs.1.75 Lacs (The actual FYP figure is Rs.4.95 Lacs).

The change in agents performance from 1971-72 to 2007-08 is phenomenal and thus the change in MBG decided in 1972 is inevitable.

The customers preference for ULIP policies and Term Plans have made concept of Sum Assured irrelevant. A policy having S.A. 25 Lacs under Plan 190 may have yearly premium as low as Rs.6000/-.

It may be observed that the earlier MBG, introduced in 1972 was higher than the then average performance (Min. 12 lives against Avg. 11.67 policies and Min. 1 Lac S.A. against Avg. 0.92 Lacs S.A.).

The No. of Lives condition has not been changed and is same i.e. 12 Lives. The changes are as following:

Agents MBG, Rule 9 (1) & (2): In first three Agency Years, an Agent will have to complete policies on minimum 12 different lives and bring at least 1 lac First Year Premium Income. Condonation: However, at the end of 3rd Agency Year, shortfall on any one count shall be condoned up to a maximum of 50%, if it is compensated with same or higher percentage on the other count and the agent completes at least six different lives and FYP Income of Rs.50.000/- in each of 1st, 2nd and 3rd Agency Years.

In fourth and subsequent Agency Years, an Agent will have to complete policies on minimum 12 different lives and bring at least 1 lac First Year Premium Income. The Condonation will not be applicable from fourth Agency Year onwards.

The 1 Lac FYP condition is much lower than the average FYP performance of agents for many last F.Ys. The First Year Premium includes First Premium and First Year Renewal Premium (FYP= FP + FYRP) and is generally higher than First Premium. These facts are evident from following data:

Average Per Agent First Year Premium (FP) Year Premium (FYP)

2003-04 1,40,203 1,48,000

2004-05 1,27,397 1,89,000

2005-06 1,66,535 2,43,000

2006-07 3,52,120 5,07,000

2007-08 3,67,020 4,95,000

Clearly, new MBG condition is quite liberal.

At 15% average commission rate (a presumed rate only, actual rate will depend upon agents business mix i.e. ratio of Traditional vs. ULIP and Single Premium vs. Non-single Premium), the commission amount would be 15,000/- p.a. or Rs.1250/- p.m. Even the minimum guaranteed NRGES wage is Rs.80/- per day. If we want our agents to take agency career seriously, their earning should be reasonably good enough to match current economic environment.

The external environmental factors such as inflation, rising per capita income, opening up of Insurance sector and overall economic scenario (which have contributed to rise in agents performance to a large extent) had made the earlier MBG irrelevant. The revised MBG will contribute to our agents becoming professionals, successful and prosperous.

IRDA has put cap on ULIP Charges:

From 1st October, 2009, IRDA has prescribed a limit on all ULIP related charges. For ULIPs having term less than or equal to 10 years, the difference between the gross and net yield should not exceed 3% and for term more than 10 years, it should not exceed 2.25%. The Fund Management Charges should not exceed 1.35%. This will apply to all (existing as well as new ULIP plans.

Update on SBA Scheme: As on 31.08.2009, 486 Development Officers have enrolled in SBA Scheme and 370 of them have become active. Total collection by SBAs so far is Rs.72.59 Crores.

The Top Three SBAs:

Name Collection 1 Shri H. Gupta, (NZ) 2.45 Crs. 2 Shri Davinder Kala, (NZ) 1.10 Crs. 3 Shri Jaswant Rai (NZ) 1.05 Crs.

SBA related queries Whom to contact: 1. For FUP updation related queries: Mail to bo_cbk1@licindia.com or call 022-67819479.

2. For all other queries: Call 022-67090501 /02 or Mail to dev_support@licindia.com.

Update on MDRT-2010: 1. As against the FYC Earning targets decided in

CMC, the no. of prospective Agents at various thresholds are as following:

Zone >= 3 Lacs >=3.75 L. >=4.5 L. CZ 142 81 46 EZ 306 181 118 ECZ 154 79 44 NZ 703 423 268 NCZ 251 141 89 SZ 318 185 110 SCZ 319 188 115 WZ 1695 1051 715 Total 3888 2329 1505

The FYC Earning Targets for Sept.-09 & Oct.-09 are 5.50 Lacs and 6.50 Lacs respectively. Our goal is to ensure that all these 3,888 agents should qualify MDRT latest by Nov.-09.

2. MDRT Qualifiers as on 31.08.2009:

Type Pre. Basis Comm. Basis TOT 7 8 COT 33 24

MDRT 510 359

(Inclusive of Qualifiers on Both counts)

3. MDRT 2009 The Top Ten Achievers:

Sr. No.

Name

FYC* (Rs. Lacs.)

1. Shri Ravi Jethani, (WZ) 134.30 2. Shri K.S. Saji, (SCZ) 99.83 3. Shri Bharat V. Parekh (WZ) 89.82 4. Shri Hitesh M. Shah (WZ) 83.44 5. Ms. Ragini, (NZ) 79.72 6. Shri Samir D. Parikh (WZ) 77.23 7. Shri Sunil S. Sohoni (WZ) 70.30 8. Shri P.S. Mehta (WZ) 61.90 9. Shri Prabhudas (SCZ) 54.56 10. Shri R.K. Shetty (WZ) 46.59

*FYC Excluding Bonus Commission Another reason to perform and celebrate: the All India Ace Competitions for Agents and Development Officers have also been announced. Refer to CO Mktg. dept. site for details.

[Printed & Published by Narendra M. Ojha for and on behalf of LIC of India- printed at Max Print SYSTEM (BOM) PVT. LTD. and published at Yogakshema, Jeevan Bima Marg, P.B. No.19953, Mumbai 400 021. Please mail achievements pertaining to Mktg. dept./Field force and feedback/suggestions to co_marketing@licindia.com & nm.ojha@licindia.com]