Restructuring of LIC and GIC
In the insurance sector as of today and in all probabilities for a long time to come, LIC and GIC will form a very significant part. The reasons for these are many.
Firstly, they have been in business for a long time and therefore, are in position to know business conditions better than any new entrant. Secondly, the network of branches and agents is large, deep and penetrating, which will take a long time for any other entrant to replicate. Thirdly, (especially the LIC), has a kind of government backing which instills faith in all would-be policy holders, much more than a private company can hope to generate.
The envisaged private sector participation in the insurance sector is unlikely to take this advantage away from LIC and GIC. In the short run atleast. LIC and GIC will continue to command a very high market presence and in the long run it will take a very good market player to dislodge LIC and GIC from their prime positions.
This also means that the reform in insurance sector will necessarily mean the reform of LIC and GIC.
In the insurance sector as of today and in all probabilities for a long time to come, LIC and GIC will form a very significant part. The reasons for these are many.
Firstly, they have been in business for a long time and therefore, are in position to know business conditions better than any new entrant. Secondly, the network of branches and agents is large, deep and penetrating, which will take a long time for any other entrant to replicate. Thirdly, (especially the LIC), has a kind of government backing which instills faith in all would-be policy holders, much more than a private company can hope to generate.
The envisaged private sector participation in the insurance sector is unlikely to take this advantage away from LIC and GIC. In the short run atleast. LIC and GIC will continue to command a very high market presence and in the long run it will take a very good market player to dislodge LIC and GIC from their prime positions.
This also means that the reform in insurance sector will necessarily mean the reform of LIC and GIC.