The Life Insurance Corporation of India (LIC) has selected J Walter Thompson, Mudra Communications, FCB Ulka and Rediffusion TYR to manage its Rs 125 crore advertising account.
In addition to the selected four agencies, the management has also kept another two names — Lintas and Grey Worldwide — for contingency purposes.
The empanelment will take place on August 31 based on the central management committee’s decision after individual agencies make their presentation. The committee comprises of the chairman, the two managing directors, zonal managers and heads of departments.
Ninety-nine ad agencies made a pitch for the LIC account, of which 13 were initially shortlisted. The appointed agencies will be asked to work exclusively for the state-owned insurance corporation, with the idea to ensure commitment and give an uplift to the corporation at a time when it is facing competition from private players.
This followed LIC deciding to do away with dealing with 45 agencies for its countrywide operations. Of the selected agencies, only Mudra Communications has been working for LIC for a long time.
LIC is seen as a lucrative account by the Rs 9,500-crore advertising industry, and one of the biggest today. Indian Oil Corporation’s ad budget exceeds that of LIC, while State Bank of India stands at about Rs 65-70 crore, Unit Trust of India at Rs 30 crore, Hindustan Petroleum Corporation and Bharat Petroleum Corporation, each at about Rs 50-60 crore.
Following the empanelment of the four agencies, the media buying will be given to the agency having the highest volume of business, whereby the corporation would benefit from the getting the cheapest price.
The advertising would be divided based on product and market segment. Different agencies would be asked to look after corporate and retail advertising.
Alternatively, LIC could also segregate the business depending upon different product segments like those for children and females, or that of term and endowment policies. Today LIC has 13 ad agencies at the national level and a host of others at each zonal level, taking the total figure to 45 agencies.
Some of the leading ad agencies currently empanelled include R K Swamy and Mudra. Earlier LIC also had O&M PR prior to privatisation.
However, when O&M bagged SBI Life Insurance account, it gave up LIC’s account since it is the usual ethical practice of many public relation (PR) agencies not to have two clients from the same sector.
The eligibility criteria for selecting an agency was that they ought to have a gross income of over Rs 25 crore, having dealt with large corporations in the public sector and having an all-India network with inhouse facilities to make creatives. LIC hopes to uplift its image and ensure greater accountability of those empanelled.
This decision is also in line with the Deloitte & Touche’s report that LIC’s ads have become stereo-type. It had recommended LIC opt for two or three agencies as is the practice worldwide. The earlier consultant — Booz, Allen & Hamilton — had also recommended LIC empanel only one agency.