The All-India Insurance Employees’ Association has urged Life Insurance Corporation and General Insurance Corporation to commence negotiations on wage hike, due since August 2007, and effect a 40 per cent hike.
At a press meet here on Sunday, Mr K. Vengugopal, General Secretary, said the demand was quite justified, as both LIC and GIC had the capacity to pay and “the operating expenses of LIC are the lowest in the industry at 5.54 per cent, against 23.11 per cent for private companies”.
He said salaries of LIC staff were much lower in comparison with wages of the private insurance companies’ staff. “However, there is not much attrition and only 4-5 per cent of the LIC staff is leaving jobs to join private companies. The demand for wage hike is therefore quite reasonable. Even internationally, the accepted norm is that 6 per cent of the premium income be allocated to salaries of the staff and LIC was only paying 4.6 per cent or so,” he explained.
He said LIC was outperforming the private companies and it had 23 crore policy-holders, with a market share of 64 per cent. LIC ended the 2007-08 fiscal with 3.73 crore new policies and a new business premium of Rs 44,000 crore. He urged the Union Government to merge the four public sector general insurance companies in the country to enable them to face competition from the private sector. “When mergers and acquisitions are the order of the day in the financial sector, there is no reason why it should not be applied to the general insurance sector,” he said.
He said the union would continue to fight the proposal to hike the FDI limit in the insurance sector from 26 per cent to 49 per cent. “The Left parties are supporting us and we are sure of fighting off the proposal at least as long as the UPA Government lasts,” he said.
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