January 20, 2015
Private insurers are shutting their branch offices in small towns due to the lack of profits from these areas, leaving the only state-run life insurer, Life Insurance Corporation (LIC), to bear much of the burden of financial inclusion in the country..
LIC opened 1,313 offices during the financial year ended 31 March 2014 while private insurers closed down 732 offices and opened 166, taking the net reduction in offices of private insurers to 566 during the fiscal year, reported. .
The Economic Times citing the recently released 2013-14 annual report of the Insurance Regulatory and Development Authority of India (IRDAI). Private insurers had closed down 1,097 branches in the previous year to cut costs..
At the end of last March, of the total 11,032 total offices of life insurance firms in the country, LIC had 79.6% of its branches in small towns while its private peers had 57.95%. Instead of expanding their footprint — which calls for capital to set up new branches and investment in training of staff —life insurance companies are investing in technology to reach out to prospective customers and enable smoother issuance of policies..