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LIC to send SMS instead of renewal notice
Economic Times, February 06, 2019

MUMBAI: State-run LIC has decided to do away with physical renewal notices and send text messages instead. According to corporation sources, the shift will happen for all policies where LIC has updated customers’ mobile numbers.

The corporation has sent out text alerts to policyholders, saying that from March 2019, it will send premium-due intimations and reminders only through SMS. LIC officials said that text messages are more effective as policyholders are alerted instantly and it is possible to send multiple reminders.

The move will result in cost savings for the corporation as it can save on postage and stationery. LIC has over 28 crore policies in force, of which over 2 crore policies were sold in 2017-18. However, unlike banks, LIC has a very small percentage of its customers’ mobile numbers. Sources said that of the total customer base, the percentage of policyholders whose phone details are available would be in single digits.

According to IRDAI sources, insurers are not obliged to send renewal notices to the policyholder as the customer is required to pay the same instalment every year or provide standing instructions. Many private insurers have already done away with the practice of sending physical notices and remind their customers through text messages, emails and reminders from their call centre.

The regulator is debating internally whether to make it mandatory for customers to provide their mobile number while applying for a policy, as this would make servicing much easier. However, unlike banking where a mobile number is essential for the bank to send out one-time passwords and transaction alerts, there is no requirement in insurance other than sending reminders.

Besides text messages for reminders, LIC will be using SMSs for grievance redressal. Customers need to send a text message to register their grievance and an executive will call back. It has also got 85 lakh users of its mobile app, which has many self-service options including payments.

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