State-run Life Insurance Corporation of India (LIC) has committed Rs 600 crore for its digital transformation journey, Sunder Krishnan, chief risk officer said on Wednesday.
The insurance giant is also aiming to become completely "paperless" in two years.
“We have hired a large system integrator for more than Rs 400 crore, a consultant for digital transformation for Rs 100 crore, and Rs 100 crore for agency transformation.
"In total, Rs 600 crore is being spent on digital transformation,” Krishnan said at an event organised by the Bengal Chamber of Commerce and Industry in Mumbai.
Earlier this week, the life insurer said it has roped in tech giant Infosys to develop its next-generation digital platform, which will lay the foundation for building high-value business applications, including customer and sales super apps, portals, and digital branches for the corporation.
This is part of the life insurer’s digital transformation programme – Digital Innovation and Value Enhancement (DIVE).
The programme is aimed at strengthening the insurance company’s digital platform in order to provide superior experience to customers, field forces, partners and employees.
Separately, LIC has appointed Boston Consulting Group as a consultant.
In its 2023-24 annual report, LIC said DIVE is already in progress, and it is expected to transform the company’s operations across value chain — from customer onboarding to claims settlement – and provide a “best-in-class” experience for both sales and customer service.
According to experts, the digital transformation initiative of the LIC will enhance customer experience.
"As demographics shift and a younger population enters the economy, LIC is losing customers to newer insurance companies that offer seamless experiences and convenience.
"Today, user experience is paramount, driven by the country's demographic dividend,” said Vivek Iyer, partner, Grant Thornton Bharat.
“The younger generation prioritises ease and convenience, and no longer view trust as a differentiating factor; they believe other insurance organisations can be trusted equally.
"Despite maintaining the largest market share, LIC recognises it is losing ground to newer entrants," Iyer added.
A senior official from the corporation said tech spending of LIC accounted for nearly 10-15 per cent of its total expenses.
“LIC’s digital upgrade has been slower and the technology spending of the company does not reflect on its website.
"There is a gap between the technological initiatives of LIC due to its large size, and its private sector peers.
"Programmes like DIVE will help reduce this gap between the two,” an insurance sector analyst said.
LIC has also launched an agency transformation project -- ‘Jeevan Samarth’ --- to meet the evolving needs of customers and strengthen the bond between customers and agents.
A T Kearney was appointed consultant for the project.
