The card subsidiary of Life Insurance Corporation (LIC) of India named LIC cards has set an aim of generating credit card sales worth Rs. 5 lakh in the upcoming financial year. This target, if achieved would lead to half a million card sales for the company.
The company has built a customer base of 50, 000 in just one year of starting its operations.
LIC cards has an arrangement with Mangalore-based Corporation Bank for the credit card business. The card is branded as that of LIC but is actually issued by Corporation Bank. LIC holds a stake of 26.34% in Corporation Bank.
The Memorandum of Understanding between the two entities defines the roles of both companies. LIC will market the card and mobilize applications, while due diligence and card management will be managed by Corporation Bank.
As per details quoted by a senior Corporation Bank official, 50, 000 credit cards have been issued to the existing LIC policy holders. The outstanding amount of these cards is worth Rs. 10 crore. The cards have been issued to customers who have paid more than Rs 25,000-50,000 premium annually on their life insurance policies.
When most of the credit card companies are backing out on their credit card and portfolio segment, LIC cards is adopting a bullish strategy to grab the maximum customer base.
LIC cards is looking forward to adding another 3-4.5 lakh cards in the upcoming year thus taking the number of its card holders to more than half a million. "LIC has a customer base of more than 22 crore (220 million) policyholders and that is the target market," an official said regarding the customer base.
LIC hopes to generate premium payments by means of credit cards thus increasing the card spend. "We have seen satisfactory spends across the customer base. People are using their cards to pay at merchant establishments apart from paying their LIC premium through the card," the official said.