The situation in India in 1950 was that due to the lack of population control each family had a population of 10 to 15 people and they all lived depending on the income of one man so if that man suffers from decsase the entire family would fall on the road at once. So we need a solution for this, even if a man dies his family should be financially assured that is only because of one insurance but at the time of 1956 there were about 245 private insurance companies in India. The rich people in the cities only provide insurance to the rich employees who can pay higher premiums but these companies do not provide insurance to the people in small towns and villages so the Indian government noticed all this and in 1956 this 245 insurance company was nationalized that is merged with the government and established a government insurance company. LIC Life Insurance Corporation of India has been established for more than 65 years but you cannot even imagine how much this company has grown in these 65 years. Government companies cannot compete with private companies. It has become one of the largest insurance companies not only in India but also in the world today with 63%. Do you know how much money there is literally 45 lakh crore rupees. It is not that common for a government company to grow to this level. Today I am going to tell you how it has stood at the number one position in the insurance sector for the last 65 years with its genius business and marketing strategies.
Whatever you want to understand about the real insurance company you need to know what kind of business they do and how they make profits. For example have you ever had a doubt that the insurance amount is much higher than when you pay the premium The company also generates money as a source of income in two ways the first is underwriting insurance, the second is investment returns under lighting revenue that is the money received by paying premiums to insurance companies. Health Insurance There are many types of insurance so regardless of the type of insurance you take you pay premiums to the insurance companies every month and how the money coming from premiums is the major revenue for the insurance companies but the point here is that some of the customers who pay the insurance do not claim the insurance and there are reasons for that. However they definitely reject the claim through the companies some people leave the premium for a few days and leave it in the middle some people pay the premium as a spirit but do not grind it in the end and it turns into profits. If you want to understand this look at this example. Whatever is left over one lakh is left over the profit of the company is called under return revenue but this is only one type of income revenue. In the same way as in bonds government securities and mutual funds also become profits for insurance companies.
In this way they are investing from the customer through a plan some money from it is also received by them from the same amount and by making some investments like the stock market the company is called the company with the returns are moving forward but these companies also have expenses like employees salaries and commissions if not the company has to maintain because the amount has to be given to the employees working there similarly there are expenses related to electricity but the main purpose of this company is to meet the needs of every customer at the time of need. Making investment accordingly we will already cover it in underwriting so now you understand the business model of insurance companies but now let’s look at LIC company LIC company was single handed in insurance industry in India from 1956 to 2021 but after India adopted liberalization in 1991 that is in every sector After doing this to allow private companies to do business freely in 2001 the Indian Government opened up the insurance industry for private companies to do business, so many private companies entered the insurance industry and started their business like HDFC, ICICI, Tata Reliance, Max Life Insurance but the point here is that there is always one Government company LIC is the only one in the number one position in the market if they compete mostly private companies will win. For example in the industry, BSNL, which is the market king
After the arrival of other private companies there were some problems in terms of network. It did not happen. LIC which started in 1956 with just five crores of funds today has created a record of being the first Hindi insurance company to make it to the top ten insurance companies in the world with a turnover of 45 lakh crores of rupees.
There are more than 13,30,000 agencies in total do you know what they are doing They go to every corner of our India and explain the importance of insurance to the people and fix the premium with them. In simple terms they work like missions to earn money. How do you think LIC Company gives commission to their policy agents instead of giving them salaries like employees the logic behind this is that if every single employee is able to convince the customer to get 100 insurance policies monthly he will fix a target saying that he will give them a salary of 15 thousand rupees. So to reach the target to earn their income they highlight the insurance and tell each and every thing to make the customer understand. And then the person will sell only 100 policies for that 15000 salary and he will not sell more selling ones because by selling more policies his company will get profit but he will not get any profit personally. so here LIC company has implemented a genius strategy that if you work on commission basis without recruiting then you will get some commission so you can earn as much money as you work hard
But here you have to notice that even now an employee works to reduce the salary given to him so if he is a commission agent The harder he works the more money he will get so he thinks that he is working directly for his own growth and indirectly becomes the reason for the growth of the company. Now do you understand the secret behind LIC company recruiting their agents as commission agents instead of employees In the present generation, many companies are selling insurance policies through social media and YouTube influencers but if you want to know how this business is actually run, once you watch this video, ask your parents, because even if many people are working, their salaries are not enough they are selling and such middle class people how much is LIC to earn one rupee more per month. Strategy No. 2 Emotional Marketing There are many reasons why government companies are not able to compete with private companies in India. One of them is marketing, even though government companies have better products and services than private companies many government companies fall behind due to lack of proper marketing. LIC company owns its customers by designing their ads and adding human emotions to them so that people know the important need of insurance policy correctly.
That is say whatever you want even if you have done an ad of LIC company on TV it connects you emotionally and makes you think about your family this is called emotional marketing. I have already said this in many videos there is no better marketing than being able to emotionally connect with the customer. Let me tell you how it works we generally go to a shop and instead of asking for mineral water we ask for water and instead of noodles we ask for maggi but do you know the reason for this All of us who do not think of names have become fixed in our minds and also LIC has made a mark in the mind of every Indian by adding emotion in their marketing and ads so that LIC company is remembered as insurance.
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