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Life Insurance Corporation of India (LIC) has created a new structure for marketing of
its insurance products through banks and other alternate channels.

It plans to increase the share of premium income collected from alternate channel to 5 per
cent in 2005-06 from just over one per cent last year.

LIC has promoted S Vishwanathan, chief (marketing), as executive director, alternate
channels, to exploit the business potential from alternate selling channels.

Alternate channels marketing heads have also been appointed at all divisional levels, the
public sector life insurer's chairman R N Bhardwaj said after signing a memorandum of
understanding with Dena Bank.

LIC's first premium income in 2004-05 was Rs 15,840 crore, of which only about Rs 200
crore accrued through alternate channels. Bhardwaj said the average premium per policy for
sales through alternate channels is much higher at Rs 13,469 against Rs 3,100 for policies
sold through traditional channels.

Also, the alternate channels provide higher average sum assured at Rs 1.80 lakh against the
usual average of Rs 75,000.

With the MoU with Dena Bank, LIC now has tie-ups with 32 banks for selling of their
products. The other banks with whom LIC has bancassurance arrangements include
Corporation Bank, Central Bank of India, Oriental Bank of Commerce and Bank of Punjab.

Dena Bank chairman M V Nair said it will initially sell LIC products at 125 branches and
scale up to 500 branches over three years. The first year target is to collect a total premium of
Rs 50 crore.

Nair said the tie-up will help the bank design structured products for high networth
individuals and also package life insurance with savings bank, deposit and loan accounts.