In order to increase financial inclusion, the Department of Posts is planning to build on its life insurance offerings that would be spun off as a separate unit.
“We have two good products which have even lower premium than what LIC offers. But we have not been able to utilise it to its full potential… there is a huge potential in the insurance sector,” Ministry of State for Communication Manoj Sinha told.
“Now we are in the process of making it a separate insurance company under the Department of Posts. First, we will have independent strategic business unit… We should be able to do this in two years,” he said.
The schemes, Postal Life Insurance (PLI) and Rural Postal Life Insurance (RPLI), were earlier available only for government sector employees. The government expanded the scheme to include professionals such as doctors, engineers, management consultants, chartered accountants, architects, lawyers and bankers, and to employees of listed companies.
The PLI, introduced in 1884, is one of the oldest life insurance schemes in the country, while the RPLI was introduced in 1995 to provide insurance cover for people residing in rural areas.
According to industry estimates, there are about 5,000 touch points for insurers in the country in contrast with over 1.5 lakh post offices with a strong rural base.
As on March 31, 2017, there were 46.8 lakh PLI and 146.8 lakh RPLI policies taken across the country. The Minister added that the Life Insurance Fund (Assest Under Management) increased 2.5 times for the schemes from Rs.25,856 crore in March 2014 to Rs.66,905 crore in March 2018.
The Minister further added that under the Sampoorna Bima Gram (SBG) Yojana — another scheme launched for the expansion of clientèle of Postal Life Insurance — which currently covers 1,244 villages, will be expanded to 10,000 villages by March 2019.