Post Offices Record 286% Jump In Insurance Earnings In Odisha’s Dhenkanal

Dhenkanal: Post offices in Dhenkanal district had recorded an increase of Rs 3.51 crore (286%) in first premium income (FPI) from insurance policies till February in the current fiscal year.

According to data by the head post office, this swelling of income was due to the Postal Life Insurance (PLI) and Rural Postal Life Insurance (RPLI) schemes.

The revenue from FPI stood at Rs 90.89 lakh in FY2018-19 with 3,164 new policyholders, the department reported. Till February of this fiscal year, the post offices had acquired 3,653 new customers, touching a year-on-year growth of 15.45%.

Having a strong presence in rural areas with RPLI, the post offices locked about Rs 1.93 crore FPI up from Rs 34.60 lakh last year.

“The scheme is gaining popularity in rural areas as compared to other players in the same space. In fact, we will easily over-achieve our annual premium target,” said the Superintendent of Dhenkanal Post Office, BB Mohanty.

In contrast, insurance behemoth Life Insurance Corporation of India (LIC) in the district clocked Rs 40.70 crore FPI this year (till February), up 25.9 per cent from Rs 32.32 crore a year ago. Besides, LIC has added 27,743 new policyholders till February in FY20 but is struggling to meet its target of 33,000 fresh insurees.

With the post offices focusing on branding its insurance products, it is indeed giving tough fight to LIC and other insurance players.

“The government’s full-fledged backing for PLI scheme builds strong trust with the people, therefore, the post offices are an emerging competition to LIC especially in rural areas,” LIC’s Chief Manager in Dhenkanal, Baishnab Charan Behera.

“Still, we are the pioneers since our ticket size (average contribution per new customer) is around Rs 15,000 compared to PLI’s Rs 10,000,” Behera added.

Apparently, the postal department has been able to witness green shoots because of its increased focus on marketing campaigns which include putting up stalls at exhibitions and fairs compared to previous years.

Moreover, when comparing LIC’s New Endowment Plan with PLI’s Santosh Endowment Assurance (EA) Plan for a sum assured for suppose say Rs 10 lakhs for 15 years, the former charges a 2.76 per cent more premium, at Rs 67,070 than the latter’s Rs 65,268, according to the premium charts available on the companies’ sites.

Besides this, the PLI scheme gives a 7.25 per cent return on investment (ROI) compared to LIC’s 4.87 per cent, according to the data analysis.

Furthermore, there are more than 200 active post office agents in Dhenkanal and the strategy going forward will be to tap the rural areas with a strong marketing strategy. This would pave way for an increased ticket size, said Mohanty.